REPORT 


COMMITTEE  ON  INVESTIGAT 


ANI)  RETRENCHMENT 


ALLEGED  ABUSES  IN  THE  NEW  YORK  CUSTOM-HOUSE. 


WA  SDINGTOS: 

GOVERNMENT  PRINTING  OFFICE. 
1872. 


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42d  Congress,  )  SENATE.  (  Report 

2d  Session.  ]  <  No.  227. 


IN  THE  SENATE  OF  THE  UNITED  STATES. 


June  4,  1872.— Ordered  to  be  printed. 


Mr.  Howe,  from  the  Committee  on  Investigation  and  Retrenchment, 
submitted  the  following 

REPORT: 

The  Committee  of  Investigation  and  Retrenchment ,  to  which  was  referred 
the  following  resolution : 

Whereas  it  has  been  declared  in  the  Senate  that  at  the  port  of  New  York  there  exists, 
and  is  maintained  by  officers  of  the  United  States,  under  the  name  of  the  general- 
order  business, 11  a  monstrous  abuse,”  fraudulent  in  character ;  and  whereas  the  following 
statement  h*as  been  made  by  a  Senator : 

“  It  was  intimated  by  some  of  the  witnesses  that  Mr.  Leet,  who  pockets  the  enormous 
profits  arising  from  that  business,  had  some  connection  with  the  White  House ;  but 
Tf  General  Porter  was  examined,  Mr.  Leet  himself  was  examined,  and  they  both  testified 
that  it  was  not  so  ;  and  counting  the  number  of  the  witnesses,  we  have  no  right  to  form 
a  different  conclusion.  But  the"  fact  remains  that  this  scandalous  system  of  robbery  is 
sustained— is  sustained  against  the  yoice  of  the  merchants  of  New  York— is  sustained 
against  the  judgment  and  the  voice  of  the  Secretary  of  the  Treasury  himself..  I  ask 
you,  how  is  it  sustained  ?  Where  and  what  is  the  mysterious  power  that  sustains  it  ? 
The  conclusion  is  inevitable  that  it  is  a  power  stronger  than  decent  respect  for  public 
opinion,  nay,  a  power  stronger  than  the  Secretary  of  the  Treasury  himself 

Therefore, 

Resolved,  That  the  Committee  on  Investigation  and  Retrenchment  be  instructed  to 
'  inquire  into  the  matter  fully  and  at  large,  and  particularly  whether  any  collusion  or 
improper  connection  with  said  business  exists  on  the  part  of  any  officer  of  the  United 
^  States,  and  that  said  committee  further  inquire  whether  any  person  holding  office  in  the 
custom-house  at  New  York  has  been  detected  in,  or  is  known  or  believed  by  his  supe¬ 
rior  officer  to  have  been  guilty  of,  bribery,  or  of  taking  bribes,  or  of  other  crime  or 
misdemeanor. 

And  said  committee  is  hereby  empowered  to  send  for  persons  and  papers. 

And  also,  whether  any  charges  for  storage  or  carting  have  been  or  are  made  by  offi¬ 
cers  of  the  custom-house,  or  persons  acting  under  the  regulations  of  the  custom-house, 
which  charges  are  not  authorized  by  law  ; 

And  also,  whether  presents  have  been  accepted  by  officers  of  the  custom-house  from 
other  officers  subordinate  to  them  or  acting  under  their  control,  and  whether  officers 
making  such  presents  have  been  selected  with  preference  to  attend  the  discharging  of 
steamships ; 

And  also,  whether  there  have  been  or  are  officers  of  the  custom-house  conniving  at 
frauds  or  irregular  practices  in  passing  the  baggage  of  travelers  arriving  in  the  port  of 
New  York ; 

And  also,  whether  articles  of  merchandise,  while  under  the  control  of  officers  of  the 
custom-house,  have  been  abstracted,  and  whether  or  not  such  articles  have,  on  applica¬ 
tion  of  the  owners  in  several  cases,  been  returned,  and  whether  any  officers  of  the  cus¬ 
tom-house  have  been  punished  for  abstracting  articles  of  merchandise  under  their 
control ; 

And  also,  to  what  extent  the  practice  of  compromising  with  merchants  defrauding 
or  attempting  to  defraud  the  revenue  has  prevailed,  and  whether  and  to  what  extent 
by  such  compromises  the  amount  of  revenue  due  to  the  United  States  in  such  cases 
has  been  diminished,  and  whether  any  and  what  pecuniary  benefit  has  been  derived 
therefrom  by  the  officers  making  such  compromises  ; 

Also,  whether  the  patronage,  officers,  or  employds  of  said  custom-house  were  used  to 
influence  or  control  either  or  both  of  the  two  last  State  conventions  of  the  republican 


II 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


party  in  New  York,  and  whether  assessments  of  money  have  been  made,  or  contribu¬ 
tions  of  money  exacted,  to  he  used  to  control  primaries,  secure  delegates  to  State 
conventions,  or  for  other  political  purposes,  and  whether  any  of  the  said  officers  in  said 
custom-house  have  been  or  are  used  as  instruments  of  political  or  party  patronage; 

ask  leave  to  submit  the  following  repo  t: 

In  order  to  facilitate  tire  production  of  testimony,  the  committee  com¬ 
menced  its  investigation  at  the  custom-house,  in  the  city  of  Hew  York. 
The  sittings  were  public,  and  were  attended  by  all  who  cared  to  do  so. 
Yielding  to  the  suggestion  of  some  gentlemen  who  urged  that  merchants 
having  large  dealings  with  the  custom-house  would  be  embarrassed  in 
giving  their  testimony  in  that  building,  the  committee  was  induced  to 
rempve  its  sittings  to  a  room  in  a  hotel  of  the  same  city.  But  that 
change  of  location  was  made  merely  as  a  concession  to  the  professed 
apprehensions  of  others. 

The  committee  did  not  and  does  not  believe  that  the  hostility  of  the 
Hew  York  customs  officers  could  be  aroused  by  any  candid:  testimony. 

But  if  hostility  could  be  aroused  by  such  means,  the  committee  is 
well  satisfied  that  such  hostility  would  not  be  lessened  at  all  by  the  fact 
that  the  testimony  was  given  in  a  building  owned  by  private  parties 
instead  of  one  owned  by  the  nation.  And,  in  spite  of  all  suggestions 
to  the  contrary,  the  committee  is  fully  persuaded  that  whatever  might 
be  the  measure  of  that  hostility,  the  merchants  of  Hew  York ‘could  not 
be  overawed  by  it. 

In  Hew  York  and  in  Washington  one  hundred  and  fifty  witnesses  were 
examined.  The  testimony,  oral  and  documentary,  submitted  to  the 
committee  comprises  more  than  2,200  pages  of  print. 

Ho  witness  who  offered  to  testify  upon  the  subject  under  investigation 
was  denied  a  hearing.  Every  one,  from  whom  it  was  supposed  infor¬ 
mation  could  be  derived,  and  who  did  not  voluntarily  appear,  was  sub¬ 
poenaed  ;  and  every  witness  who  was  sworn  was  allowed  to  state  what¬ 
ever  he  knew,  or  had  heard,  or  believed,  or  suspected  concerning  the 
matters  under  investigation. 

The  editors  of  several  newspapers  were  called  before  the  committee, 
who,  from  the  vehemence  with  which  they  had  discussed  the  affairs  of 
the  custom-house,  had  warranted  the  inference  that  they  were  particu¬ 
larly  well  informed  upon  the  subject;  and,  when  it  was  ascertained  that 
they  had  been  inspired  not  by  anything  they  knew,  but  were  by  what 
they  had  heard,  the  committee  did  not  hesitate  to  let  them  repeat  all 
the  rumors,  wTell  or  ill  founded,  which  had  been  distilled  through  their 
respective  journals. 

The  sources  of  information  are  exhausted.  If  the  truth  upon  the 
main  issues  is  not  discovered  in  the  testimony  submitted,  manifestly  it 
is  because  the  truth  is  not  attainable.  The  testimony  is  conflicting.  It 
could  hardly  have  been  expected  to  be  otherwise.  Comparatively  few 
witnesses  were  examined  who  did  not  appear  more  or  less  in  the  char¬ 
acter  of  partisans.  Some  had  theories  to  vindicate;  some  had  enemies 
to  attack ;  some  had  friends  to  protect;  some  had  personal  wrongs,  real 
or  imaginary,  to  redress.  Yet,  in  spite  of  contradictions,  the  substan¬ 
tial  truth  is  clearly  discernible. 

Considering  the  subjects  referred  for  investigation  in  the  order  in 
which  they  are  named  in  the  resolution  above  quoted,  the  committee 
lias  to  submit,  first,  that  no  “monstrous  abuse”  has  been  discovered 
in  connection  with  “the  general-order  business,”  unless  it  be  the  mis¬ 
representation,  not  to  say  mendacity,  which  has  been  piled  upon  it. 

The  very  term  “general-order  business”  is  but  little  better  than  a 
nickname.  The  real  business  which  has  come  to  be  so  designated  quite 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Ill 


too  generally  is  nothing  else  than  the  storage  of  imported  merchandise 
for  which  no  owner  appears  to  pay  or  to  secure  payment  of  the  duties 
at  the  time  it  is  unloaded  from  the  vessel. 

No  merchandise  can  be  discharged  without  the  permission  of  the  col¬ 
lector  of  the  port.  That  command  is  as  old  as  our  customs  laws.  To 
each  importer  who  presents  his  invoice  at  the  custom-house  and  pays 
his  duties,  or  gives  bond  to  pay  them,  a  special  permit  is  issued,  which 
authorizes  the  discharge  of  his  particular  importation.  But  when  the 
time  prescribed  by  law  for  making  such  entries  has  expired,  a  general 
permit,  or  what  is  called  u  a  general  order,”  is  issued  by  the  collector, 
which  authorizes  the  unloading  of  all  goods  which  have  not  been  so 
entered. 

Goods  unloaded  under  a  special  permit,  if  the  duties  have  been  actu¬ 
ally  paid,  are  at  once  taken  into  the  possession  of  the  owner  and  removed 
wherever  and  however  he  directs.  If  the  duties  have  not  been  paid, 
but  a  bond  has  been  given  for  their  payment,  the  goods  are  sent  to  such 
of  the  buildings  authorized  by  the  Secretary  of  the  Treasury  to  store 
bonded  goods,  and  which  are  thence  called  bonded  warehouses,  as  the 
importer  may  select.  There  they  are  retained  under  the  supervision  of 
an  officer  of  customs,  known  as  a  store-keeper,  until  the  duties  are 
actually  paid. 

But  it  is  manifest  that  some  one  must  take  charge  of  the  goods  for 
which  no  owner  appears,  and  which  are  for  that  reason  discharged  under 
the  general  order.  It  is  presumed  that  at  some  time  the  owner  will 
appear  and  want  his  goods,  and  it  is  certain  the  Government  will  some 
time  want  its  duties.  To  the  end  that  the  consignee  may  eventually 
get  his  merchandise  and  the  Government  get  its  duties,  the  law  has 
always  committed  such  goods  to  the  custody  of  the  collector.  What 
the  collector  shall  do  with  such  goods  evidently  concerns  no  one  but  the 
Government  and  the  owner.  The  Government  is  only  concerned  that 
they  be  kept  securely  to  answer  its  claim  for  duties.  The  owner  is  only 
concerned  that  they  be  kept  securely,  and  that  he  be  not  charged  un¬ 
reasonably  for  their  custody.  What  those  charges  shall  be  has  never 
been  declared  by  any  law.  They  have  been  and  are  left  to  the  discre¬ 
tion  of  the  collector.  Until  the  year  1857  that  discretion  was  exercised 
without  aid  or  advice  from  any  quarter.  But  in  that  year  the  Chamber 
of  Commerce  of  New  York  came  to  the  aid  of  the  collector,  and  sub¬ 
mitted  a  schedule  of  charges  proper  to  be  made  for  the  storage  of  sev¬ 
eral  different  kinds  of  goods.  That  schedule  was  adopted  by  the  col¬ 
lector,  and  for  many  years  continued  to  be  the  rule  for  those  who  were 
from  time  to  time  employed  in  the  storage  of  unclaimed  goods. 

But  in  the  course  of  time  that  schedule  was  found  defective  in  two 
particulars :  First,  many  kinds  of  merchandise  were  imported  into  New 
York  for  which  no  charge  was  named  in  the  schedule  ;  and  second,  after 
the  war  commenced,  and  the  price  of  labor  and  rents  advanced,  the 
charges  fixed  in  the  schedule  were  found  too  low  to  be  remunerative. 

Collector  Barney  undertook  to  remedy  the  last  difficulty  by  allowing 
(according  to  the  testimony  of  Deputy  Collector  James)  an  advance 
— first  of  30,  then  of  60,  and  lastly  150  per  cent,  on  those  charges. 
This  last  rate  was  again  reduced,  after  the  war,  by  Collector  Dra¬ 
per,  to  an  advance  of  60  per  cent,  on  the  prices  fixed  by  the  cham¬ 
ber  of  commerce.  Since  that  time  the  rule  governing  the  charges  of 
warehousemen  for  handling  and  storing  such  unclaimed  goods  as  were 
enumerated  in  the  schedule  prepared  by  the  chamber  of  commerce,  has 
been  the  sums  named  in  that  schedule,  with  60  per  cent,  added.  For 
goods  not  named  therein,  the  warehouseman  has  charged  whatever  lie 


IV 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


pleased,  subject  always  to  the  liability  of  having  his  charges  reduced 
if,  upon  appeal  to  the  collector,  they  were  deemed  unreasonable. 

The  quantity  of  goods  which  would  be  discharged  from  any  given  cargo 
upon  the  general  order  of  the  collector  would  of  course  depend  very  much 
upon  the  time  allowed  after  the  arrival  of  the  vessel  before  unloading. 
The  longer  the  vessel  lay  at  her  dock  before  unloading,  the  more  invoices 
would  be  entered  and  the  more  special  permits  would  be  obtained.  The 
more  permits  are  obtained,  the  fewer  goods  remain  to  be  discharged 
under  the  general  order. 

Under  different  enactments,  different  times  have  been  prescribed  for 
the  unloading  of  vessels.  According  to  the  testimony  of  the  assistant 
collector,  Mr.  Clinch,  who  has  been  connected  with  the  customs  service 
since  1838,  fifteen  days,  were  allowed  for  unloading  a  vessel  from  the 
year  1789  to  1821.  Under  the  act  of  March  3,  1821,  twenty  days  were 
allowed  for  unloading  vessels  of  more  than  300  tons  burden.  These 
provisions  were  subject  to  the  important  qualification  that  vessels  might 
unload  at  any  time  upon  giving  five  days’  previous  notice  of  the  pur¬ 
pose  to  do  so.  Of  course  under  such  regulations  very  few  goods  re¬ 
mained  to  be  discharged  under  the  general  order. 

It  was  then  the  usage,  according  to  the  same  authority,  for  the  col¬ 
lector  to  take  possession  of  all  goods  not  permitted  and  deposit  them  in 
warehouses  hired  by  himself,  “  and  put  the  storage  in  his  pocket,  and 
nobody  to  say  him  nay*,  nor  any  fault  to  be  found  therewith.” 

But  by  the  act  of  March  3,  1841,  the  collector  was  required  to  lease 
all  stores  “  on  public  account,”  and  all  charges  for  storage  were  subject 
“to  regulation  by  the  Secretary  of  the  Treasury.” 

Under  that  act  the  collector  was  still  left  the  sole  custodian  of  unclaimed 
goods.  The  storage  of  such  goods  he  still  put  in  his  pocket,  but  he  was 
required  to  render  an  account  of  all  receipts  from  such  charges,  and  to 
j)ay  into  the  Treasury  any  excess  over  $2,000  received  in  any  one  year. 

The  present  warehouse  system  was  adopted  in  1854,  in  pursuance  of 
the  “act  to  extend  the  warehousing  system,  by  establishing  private 
bonded  warehouses,  and  for  other  purposes,”  approved  March  28.  By 
the  second  section  of  that  act  it  was  provided  “  that  the  unclaimed  goods, 
wares,  or  merchandise  required  by  existing  laws  to  be  taken  possession 
of  by  collectors  of  the  customs,  may  be  stored  in  any  public  warehouse 
owned  or  leased  by  the  United  States,  or  in  any  private  bonded  ware¬ 
house  authorized  by  this  act.”  Since  that  date  the  storage  of  bonded  and 
unclaimed  goods  has  been  relinquished  to  the  owners  of  private  ware¬ 
houses  duly  authorized.  Bonded  goods  have  been  sent,  as  before  ob¬ 
served,  to  such  warehouses  as  the  importer  has  designated,  but  un¬ 
claimed  goods  have  been  sent  to  such  warehouses  as  the  collector  has 
designated,  simply  because,  as  no  owner  appeared  to  give  direction  to 
them,  the  collector  alone  could  properly  provide  for  their  safe-keeping. 

In  the  mean  time  a  great  change  has  taken  place  in  the  carrying  busi¬ 
ness  on  the  ocean.  The  freighting  between  Europe  and  the  United 
States  is  no  longer  done  by  sail- vessels,  but  the  great  bulk  of  it  is  done 
by  steam-vessels.  , 

The  carrying  of  passengers  is  an  important  item  in  the  business  of 
steamers.  For  the  accommodation  of  passengers  it  is  necessary  that 
the  boats  should  have  regular  days  of  departure  both  from  our  own  and 
from  foreign  ports.  Time  was  not  so  very  important  in  the  economy  of 
a  vessel  measuring  a  few  hundred  tons,  propelled  only  by  the  wind,  and 
which  might  not  have  a  wind  to  sail  on  for  many  days.  But  to  a  vessel 
measuring  thousands  of  tons — propelled  by  steam — and  which  can  tra¬ 
verse  one-tenth  of  the  distance  across  the  ocean  on  any  fair  day,  time 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


V 


is  of  great  importance.  A  sail- vessel  could,  and  often  did,  lie  in  port  for 
days  and  weeks.  A  steam-vessel  cannot  afford  sucli  expenditure  of 
time. 

To  provide  for  this  new  emergency  Congress  enacted  a  law  on  the  3d 
of  August,  1854,  by  which  steam- vessels  were  authorized  to  discharge 
their  cargoes  immediately  upon  their  arrival  in  port,  if  such  discharge 
was  agreed  upon  in  the  bill  of  lading.  Prior  to  that  act  the  contract  of 
affreightment  had  been  in  effect  a  contract  by  which  the  carrier  under¬ 
took  to  transport  merchandise  to  the  port  of  delivery  and  to  retain  it 
on  board  his  vessel  for  at  least  five  days,  to  enable  the  consignee  to 
make  his  entries.  Under  that  act  the  contract  of  affreightment  became 
in  effect  a  contract  to  transport  merchandise  to  the  port  of  delivery,  and 
to  deliver  it  at  once  to  the  collector  of  the  port. 

By  the  law  the  vessel  had  the  privilege  of  discharging  immediately 
upon  arrival.  By  arrangement  with  the  carriers,  the  usage  has  obtained 
that  if  the  vessel  does  in  fact  discharge  within  forty-eight  hours  after 
her  arrival  in  port,  all  charges  paid  by  the  importer  to  the  general-order 
store,  on  goods  entered  within  that  time,  are  deducted  from  the  freights. 

In  practice  it  has  resulted  that  when  the  vessel  was  not  pressed  for 
time  she  has  not  discharged  until  after  the  forty-eight  hours  had  expired ; 
but  if,  detained  on  her  passage  by  heavy  weather  or  other  accident,  it 
became  necessary,  in  order  to  depart  on  her  regular  day  of  sailing,  she 
has  discharged  her  cargo  immediately  upon  her  arrival,  and  the  whole 
cargo  has  consequently  gone  into  the  general-order  store.  Under  that 
lawT  the  storage  of  goods  has  very  largely  increased. 

Such  in  brief  is  the  nature  and  history  of  the  so-called  “  general-order 
business.”  It  is  the  product  of  the  general  order  given  by  the  collector 
to  unload  such  imported  merchandise  as  has  not  been  claimed  by  the 
owner,  just  as  the  hay-harvest  is  the  product  of  summer.  But  it  is  no 
more  proper  to  call  the  storage  of  goods  unloaded  under  the  general 
order  the  “general-order  business”  than  to  call  the  hay-harvest  the 
“summer  business.” 

Different  collectors  at  different  times,  under  the  warehousing  act  of 
1854,  have  selected  difierent  persons  in  the  port  of  New  York  for  the 
storage  of  unclaimed  goods.  At  difierent  times  they  have  changed  such 
selections.  It  does  not  appear  from  the  testimony  that  prior  to  1869 
the  public  ever  took  any  especial  interest  in  such  selections. 

Until  1869  the  Ounard  Steamship  Company,  running  a  line  of 
steamers  from  Liverpool,  landing  at  Jersey  City,  and  the  North  German 
Lloyds,  running  a  line  of  steamers  from  Bremen,  landing  at  Hoboken, 
had  been  allowed  the  storage  of  such  unclaimed  goods  as  they  severally 
transported;  but  soon  after  Mr.  Grinnell  assumed  the  collectorship  of 
the  port  of  New  York  he  transferred  that  storage  to  warehouses  on  the 
New  York  side  of  the  North  Biver.  Against  that  transfer  those  com¬ 
panies  remonstrated. 

It  may  be  thought  strange  that  two  foreign  steamship  companies 
should  be  the  first  to  make  an  issue  with  the  collector  of  an  American 
port,  and  should  be  the  first  to  appeal  to  the  American  public  to  vindi¬ 
cate  their  right  to  store  American  merchandise  on  American  ground. 
But  those  companies  possessed  large  means  to  make  such  remonstrances 
effective.  They  command  a  capital  of  millions.  Their  agents  are  in 
constant  business  relations  with  the  wealthiest  and  most  powerful  mer¬ 
chants  ©f  New  York.  They  entertain  on  their  boats  thousands  of  the 
most  cultivated  and  most  influential  citizens,  who  annually  visit  Europe 
or  return  therefrom.  They  have  ample  opportunities  for  making  friends. 
And  they  did  support  their  remonstrances  with  so  much  vigor  that  the 


VI 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Secretary  of  tlie  Treasury  was  induced  to  say  to  Collector  Grinnell  that 
“  upon  a  full  consideration  of  all  the  papers  relative  to  the  storage  of 
goods  upon  delivery  from  the  vessels  of  the  foreign  steamship  com¬ 
panies,  I  can  see  no  valid  objections  to  the  use  of  the  stores  upon  the 
companies7  piers,  if  those  stores  can  be  placed  under  the  exclusive  con¬ 
trol  of  the  officers  of  the  customs.” 

This  language  has  been  construed  as  an  order  to  the  collector  to  re¬ 
turn  the  storage  of  unclaimed  goods  to  the  warehouses  at  Jersey  City 
and  Hoboken,  and  in  the  extract  from  the  Senate  debate,  which  is 
quoted  in  the  preamble  of  the  resolution  which  directed  the  pending 
investigation,  it  is  observed : 

But  tlie  fact  remains  that  this  scandalous  system  of  robbery  is  sustained ;  is  sustained 
against  the  voice  of  the  merchants  of  New  York ;  is  sustained  against  the  judgment 
and  the  voice  of  the  Secretary  of  the  Treasury  himself.  I  ask  you,  how  is  it  sustained  ? 
Where  and  what  is  the  mysterious  power  that  sustains  it  ?  The  conclusion  is  inevit¬ 
able  that  it  is  a  power  stronger  than  decent  respect  for  public  opinion ;  nay,  a  power 
stronger  than  the  Secretary  of  the  Treasury  himself. 

The  answer  to  this  suggestion  is  that  the  language  used  by  the  Sec¬ 
retary  is  not  in  terms  an  order.  There  is  no  good  reason  for  believing 
it  was  intended  as  an  order.  If  it  had  been  so  intended,  it  is  impossi¬ 
ble  to  understand  why  it  should  not  have  been  enforced.  In  all  the 
testimony  submitted  there  is  no  appearance  of  a  higher  power  any¬ 
where  which  restrains  its  enforcement.  If  there  was  any  such  power, 
it  was  very  certainly  a  power  quite  independent  of,  and  unconnected 
with,  the  firm  of  Leet  &  Stocking. 

The  letter  of  the  Secretary  above  quoted  was  written  on  the  1st  of 
June,  1870.  At  that  time  Leet  &  Stocking  were  not  in  possession  of 
any  part  of  the  storage  claimed  by  the  steamship  companies.  That 
storage  was  then  furnished,  and  had  been  from  the  time  it  was  taken 
from  the  companies,  by  the  firm  of  Mason  &  Co.,  with  whom  neither 
Mr.  Leet  nor  Mr.  Stocking  had  the  slighest  connection.  The  collector 
certainly  was  not  prevented  from  returning  the  storage  to  the  steam¬ 
ship  companies  by  Leet  &  Stocking  or  by  their  friends. 

Leet  &  Stocking  first  engaged  in  tbe  warehouse  business  on  the  15th 
of  June,  1870,  as  partners  of  one  Luther  Horton,  and  under  the  firm- 
name  of  L.  Horton  &  Co.  But  no  unclaimed  goods  imported  by  the  Cu- 
nard  Company  or  by  the  North  German  Lloyds  were  committed  to  the 
custody  of  Horton  &  Co.  After  the  lapse  of  a  few  weeks  Horton  re¬ 
tired  from  the  company,  and  the  business  has  since  been  carried  on  in 
two  different  warehouses;  one  of  which  is  managed  under  the  firm-name 
of  George  K.  Leet  &  Co.,  and  the  other  under  the  name  of  Leet  &  Co. 
They  explained  the  use  of  different  firm-names  upon  the  ground  that 
they  wished  to  keep  the  accounts  of  the  different  warehouses  separately, 
in  order  to  show  which  was  the  most  profitable. 

In  July,  1870,  Mr.  Thomas  Murphy  succeeded  Mr.  Grinnell  as  col¬ 
lector  of  New  York.  On  the  19th  of  September  following,  Mason  &  Co. 
were  detected  in  some  malpractice  in  the  conduct  of  their  business. 
Their  warehouse  was  closed;  Mason  fled  the  country,  and  since  that  time, 
and  until  a  late  period,  Leet  &  Stocking  have  continued  to  store  all 
unclaimed  goods  imported  by  the  Cunard  and  the  North  German  lines. 

But  they  have  not  been  permitted  to  prosecute  their  business  free  from 
molestation. 

It  does  not  appear  that  the  Cunard  Steamship  Company  and  the 
North  German  Lloyds  have  ever  relinquished  the  purpose  of  recovering 
that  business.  On  the  contrary,  since  its  transfer  to  Leet  &  Stocking 


NEW  YORK  CUSTOM-HOCSE  INVESTIGATION.  VII 

the  companies7  efforts  to  regain  it  seem  to  have  been  redoubled,  and 
those  efforts  have  been  largely  aided  by  political  events. 

In  addition  to  the  support  of  such  attorneys  as  they  chose  to  employ, 
and  of  such  merchants  as  friendship  or  interest  attached  to  them,  it 
happened  that  their  cause  was  espoused  by  nearly  the  whole  body  of 
one  political  party,  and  by  a  very  active,  if  not  large,  fragment  of  the 
other. 

Messrs.  Leet  &  Stocking  succeeded  to  that  portion  of  the  general- 
order  business  formerly  enjoyed  by  the  steamship  companies,  as  has 
been  observed,  in  September,  1870,  and  by  direction  of  Collector  Mur¬ 
phy.  Mr.  Murphy  was  appointed  collector  by  President  Grant.  Pres¬ 
ident  Grant’s  appointments  have  been  habitually  somewhat  distasteful 
to  the  democratic  party.  Mr.  Murphy’s  own  appointment  proved  dis¬ 
tasteful  to  a  portion  of  the  republican  party,  and  so  it  happened,  per¬ 
haps  not  very  logically,  but  not  very  unnaturally,  that  Messrs.  Leet  & 
Stocking  fell  heirs  to  all  the  malice  which  the  cupidity,  the  wealth,  and 
the  influence  of  two  great  trading  companies  could  engender,  as  well  as 
all  that  the  enemies  of  Thomas  Murphy,  the  President,  and  the  repub¬ 
lican  party  could  inspire.  A  storm  of  obloquy  and  reproach  burst  upon 
their  heads.  The  press  opened  upon  them  its  myriad  mouths.  A  com¬ 
mittee  of  the  two  Houses  of  Congress  was  instructed  to  inquire  and  re¬ 
port  upon  the  merits  of  the  great  controversy.  In  September,  1870, 
Messrs.  Leet  &  Stocking  were  quite  unknown  to  fame.  In  twenty  months 
they  had  acquired  a  notoriety  never  by  the  greatest  genius,  and  only 
rarely  by  the  greatest  heroes  or  greatest  criminals,  achieved  in  so  brief 
a  period.  Twenty  months  ago  it  is  probable  that  these  young  men  had 
but  seldom  seen  either  of  their  own  names  in  the  newspapers.  There 
are  now,  probably,  but  few  names  more  widely  known  to  the  readers  of 
American  newspapers  than  those  of  Leet  &  Stocking. 

The  city  of  New  York  has,  within  a  few  years  past,  been  the  seat 
of  two  other  semi-political  businesses  which  have  attracted  wide  noto¬ 
riety.  A  ring  (to  use  a  term  much  more  readily  understood  than  defined) 
by  means  half  political  and  half  financial,  secured  control  of  the  Erie 
Railway,  in  which  is  invested  a  capital  of  more  than  one  hundred  mil¬ 
lions.  That  control  was  so  disastrous  to  the  road  that  when  it  was  but 
recently  wrested  from  them,  the  stock  advanced  in  the  market  from 
thirty  to  seventy-two  per  cent. 

Another  ring,  by  means  half  political  and  half  financial,  secured  the 
control  of  the  government  of  the  city  and  county  of  New  York.  In  two 
years  it  lias  wrung  from  the  people  taxes  to  the  amount  of  nearly  forty- 
seven  millions,  and  has  besides  accumulated  a  debt  to  the  amount  of 
more  than  forty -two  millions  on  those  municipalities.  Both  those  enter¬ 
prises  found  able,  resolute,  constant  advocates  among  the  people  and 
press  of  New  York.  There  were  presses  in  New  York  which  did  not 
attack  the  administration  of  Leet  &  Stocking.  But  it  would  not  be  safe 
to  say  that  there  was  a  press  there  which  defended  them  ;  nor  would  it 
be  safe  to  say  that  there  was  more  than  one  of  the  journals  of  that  city 
which  assailed  the  administrations  of  William  M.  Tweed  or  of  Jay 
Gould  with  anything  like  the  passionate  vehemence  which  steadily  fol¬ 
lowed  Leet  &  Stocking. 

An  experience  so  wholly  unique  seems  to  call  for  a  statement  of  who 
Leet  &  Stocking  are,  and  what  they  have  done  that  they  should  be  so 
heavily  loaded  with  opprobrium. 

Of  Wilbur  F.  Stocking  the  testimony  discloses  little  prior  to  his  con¬ 
nection  with  Colonel  Leet  which  could  be  characterized  as  particularly 
meritorious,  and  nothing  which  could  be  characterized  as  otherwise.  For 


VIII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


some  months  before  entering  the  warehouse  business  yith  Mr.  Horton 
and  Mr.  Leet,  he  had  been  employed  by  Collector  Grinnell  to  superin¬ 
tend  the  cartage  business.  Prior  to  that  he  had  for  several  years  been 
engaged  in  the  manufacture  of  furnaces  and  ranges,  having  a  place  of 
business  both  in  New  York  and  in  Washington.  He  seemed  to  have 
discharged  his  duties  in  connection  with  the  cartage  business  to  the  sat¬ 
isfaction  of  Mr.  Griunell,  for  he  retained  the  position  until  the  bureau 
was  abolished  by  order  of  the  Secretary  of  the  Treasury.  His  social 
position  is  indicated  from  the  fact  that  he  married  a  daughter  of  a  judge 
of  the  Supreme  Court  of  the  United  States  during  the  autumn  of  1871. 
The  matter  and  the  manner  of  his  evidence  betray  an  intelligent  man 
of  business  and  a  candid  witness. 

Of  the  antecedents  of  Colonel  Leet,  the  testimony  gives  fuller  in¬ 
formation.  He  was  born  in  Pennsylvania  in  the  year  1836.  In  1862  he 
was  employed  as  chief  clerk  in  the  freight  depot  of  the  Pittsburgh,  Fort 
Wayne  and  Chicago  Bailroad,  at, Chicago.  Before  going  to  Chicago, 
he  had  been  employed  as  assistant  cashier  of  the  Pennsylvania  Bail-, 
road,  at  Pittsburgh.  When,  in  1862,  the  Mercantile  Association  of  Chi¬ 
cago  raised  for  the  service  of'  the  country  what  was  known  as  the  Chicago 
Mercantile  Battery,  composed  of  some  of  the  best  material  to  be  found 
in  that  city,  Colonel  Leet,  then  twenty-six  years  of  age,  resigned  his 
place  in  the  railroad  company,  and  entered  the  service  of  the  United 
States  as  a  private  soldier  in  that  battery.  He  continued  to  serve  as  a 
private  until  the  Army  reached  Vicksburgh,  in  the  summer  of  1863, 
when  he  was  detailed  to  act  as  a  clerk  for  General  Bawlins,  then  as¬ 
sistant  adjutant  general  to  General  Grant.  Working  under  the  imme¬ 
diate  eye  of  General  Bawlins,  he  won  his  first  promotion,  and  received, 
in  October  following,  the  commission  of  captain  and  assistant  adjutant 
general,  and  was  assigned  to  duty  upon  the  staff  of  General  Grant.  He 
'continued  on  that  duty  as  long  as  the  latter  continued  at  the  head  of  the 
Army.  After  General  Bawlins  became  Secretary  of  War,  Colonel  Leet 
was  assigned  to  special  duty  in  that  Department,  on  which  he  wras  con¬ 
tinued  until  February,  1870,  when  he  resigned  his  commission. 

It  wTill  hardly  be  denied  that  two  young  Americans  of  such  charac¬ 
ter  and  such  antecedents  have  as  clear  a  right  to  ask  for  employment 
in  the  American  service  as  have  two  foreign  steamship  companies,  every 
dollar  of  whose  stock  is  owned  and  every  dbllar  of  whose  earnings  is 
spent  abroad.  Messrs.  Leet  &  Stocking  did  ask  for  a  share  of  the  so- 
called  general-order  business.  They  received  it.  They  were  first  in¬ 
ducted  into  that  business  not  by  Mr.  Murphy,  but  by  Mr.  Grinnell. 
Every  circumstance  attending  their  introduction  to  the  business  is 
minutely  detailed  in  the  evidence,  repeated  and  re-repeated.  Colonel 
Leet  was  the  first  to  engage  in  the  business.  As  early  as  March,  1869, 
he  went  to  New  York  with  a  view  of  obtaining  a  part  of  it.  He  took 
with  him  a  letter  of  recommendation  addressed  to  Mr.  Grinnell  by  the 
Hon.  E.  B.  Washburne,  then  Secretary  of  State.  He  also  took  with 
him  a  letter  from  the  President,  of  which  the  following  is  a  copy: 

Executive  Mansion, 
Washington,  D.  C.,  March  19,  1869. 

Dear  Sir  :  This  will  introduce  you  to  Colonel  G.  K.  Leet,  who  served  under  me  from 
early  in  the  war  to  the  present  day,  from  the  fall  of  Vicksburgh  forward  as  a  staff 
officer.  He  is  a  business  man  of  unquestioned  integrity.  His  experience  before  the 
war  fits  him  for  business  of  almost  any  kind.  He  now  proposes  to  resign  from  the 
Army  to  engage  in  private  life,  and  I  cheerfully  commend  him  as  possessing  all  the 
qualities  necessary  to  inspire  confidence. 

Yours  truly, 


M.  H.  Grinnell. 


U.  S.  GRANT. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


IX 


A  great  many  fruitful  suspicions  have  beeu  planted  in  the  simple 
fact  that  the  President  recommended  Mr.  Leet  to  the  confidence  of  Mr. 
Grinnell.  There  was  no  conceivable  reason  why  he  should  not  have 
done  so.  There  was  one  satisfactory  reason  why  he  should  have  done 
so.  That  reason  is  that  Colonel  Leet  had  won  his  own  confidence. 
There  is  not,  in  the  testimony  or  outside  of  it,  the  faintest  suggestion 
that  Colonel  Leet  was  indebted  to  any  kind  of  favoritism,  political  or 
personal,  for  his  employment  on  the  staff  of  General  Grant.  He  was, 
in  the  summer  of  1863,  an  utter  stranger  to  the  General,  and  to  every 
member  of  his  staff.  General  Rawlins  was  in  need  of  a  clerk.  Col¬ 
onel  Bowers  was  inquiring  through  the  command  where  a  private  was 
to  be  found  who  would  probably  make  a  good  clerk.  A^iy  one  who 
knew  the  intecedents  of  Mr.  Leet  would  be  very  apt  to  suggest  him. 
A  young  man  who  had  been  employed  by  those  great  corporations,  the 
Pennsylvania,  and  the  Pittsburgh,  Fort  Wayne  and  Chicago  Railway 
Companies  as  assistant  cashier  and  as  chief  clerk,  was  very  likely  to  be 
competent.  And  a  young  man  who  had  surrendered  such  genteel  and 
well-paid  labors,  for  the  pay  and  privations  of  a  private  soldier,  was 
very  likely  to  be  faithful.  Some  one  it  seems  did  suggest  him.  The 
name  of  that  person  is  unknown.  General  Rawlins  tried  him,  and 
thereafter  whatever  favor  he  received  was  granted  him  as  the  meed  of 
services  performed  under  the  direct  supervision  of  those  exacting  sol¬ 
diers  Generals  Grant  and  Rawlins. 

The  time  has  been  when  it  was  popularly  thought  rather  creditable 
in  a  private  soldier  to  win  the  notice  and  favor  of  his  general.  The 
time  has  been  when  the  general  could  condescend  to  favor  the  deserv¬ 
ing  soldier  in  the  ranks  without  exposing  himself  to  public  reproach  or 
popular  suspicion  thereby.  But  that  was  before  politics  went  mad. 
When  politics  shall  have  become  sane  again  it  is  to  be  hoped  that  time 
will  return.  But  the  fact  is  indubitable  that  the  President  gave  Col¬ 
onel  Leet  a  letter  to  Mr.  Grinnel!.  It  is  a  fact  also,  that  upon  presenting 
to  Mr.  Grinnell  the  letters  of  the  President,  and  of  Mr.  Washburne, 
Mr.  Leet  was  encouraged  to  believe  that  some  employment  would  be 
found  for  him.  It  is  a  fact  that  in  July  following  an  arrangement  was 
made  by  which  a  share  of  the  general-order  business  was  assigned  to 
the  warehouse  occupied  by  one  Mr.  Bixby,  an  experienced  warehouse¬ 
man,  and  a  democrat  in  politics,  the  profits  amounting  to  some  $10,000 
per  year,  to  be  divided  equally  between  Mr.  Bixby  and  Mr.  Leet. 

It  is  observable  that  the  President,  in  his  letter  to  Mr.  Grinned, 
merely  attested  the  fitness  of  Colonel  Leet  for  business.  He  did  not 
ask  any  appointment  for  him ;  still  less  did  he  ask  for  any  share  of  the 
general-order  business  to  be  assigned  to  him.  Colonel  Leet  testifies 
that  he  did  not  communicate  to  the  President  his  design  to  apply  for  a 
share  of  that  business.  He  says  that  some  two  months  before  he  had 
expressed  to  General  Grant  a  desire  to  get  into  that  business,  and  the 
latter  did  not  then  seem  to  know  what  that  business  was. 

General  Porter  testifies  that  after  Colonel  Leet  resigned  his  commis¬ 
sion  in  the  Army,  some  time  in  February  or  March,  1870,  he  proposed 
to  apply  for  the  contract  to  supply  the  labor  which  is  done  in 'the 
appraiser’s  stores,  which  labor  is  let  to  the  lowest  bidder;  that  he  tried 
to  dissuade  the  colonel  from  having  any  connection  with  the  New 
York  custom-house,  and  expressed  the  belief  that  it  would  be  un¬ 
pleasant  for  the  President  to  have  him  connected  with  it.  He  also 
testifies  that  afterward,  at  the  instance  of  the  President,  he  addressed 
a  letter  to  Colonel  Leet,  then  in  Chicago,  of  which  the  following  is  a 
copy: 


X 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Executive  Mansion, 
Washington,  D.C.,  May  4,  1870. 

My  Dear  Leet  :  I  do  not  like  to  be  the  bearer  of  bad  news  to  yon,  but  I  think  I 
ought  to  tell  you  what  the  President  said  when  he  returned  from  New  York.  He 
remarked  that  he  had  heard  so  much  talk  about  corruption  in  custom-houses,  jobs, 
the  influences  brought  to  bear  in  getting  positions,  &c.,  that  he  would  never  appoint 
any  one  who  had  been  around  him  to  a  position  in  a  custom-house,  no  matter  what  his 
qualifications. 

In  speaking  about  you  he  said  (I  don’t  know  who  told  him  of  the  offer)  that  you 
ought  to  accept  Don  Cameron’s  proposition,  for,  though  he  believes  you  as  pure  as  any 
one,  yet  he  would  never  consent  to  have  you  go  to  a  custom-house.  He  said  the 
attacks  would  be  constant,  and  injure  both  you  and  him.  He  feels  just  as  I  have 
always  felt  about  such  matters.  You  can  now  judge  of  the  situation  and  act  accord¬ 
ingly- 

Yours,  in  great  haste, 

HORACE  PORTER. 

He  told  me  I  could  say  this  to  you. 


He  also  testified  that  after  Mr.  Murphy  became  collector,  seeing  in  a 
newspaper  an  article  which  attributed  to  the  latter  the  declaration  that 
in  dispensing  j)atronage  he,  Murphy,  was  controlled  more  or  less  by  higher 
authority,  by  direction  of  the  President,  he  inclosed  the  article  to  Mr. 
Murphy,  with  a  letter,  of  which  the  following  is  a  copy  : 

Executive  Mansion, 
Washington,  I).  C.,  October  31,  1870. 

Dear  Sir:  I  am  directed  by  the  President  to  forward  to  you  the  marked  portion  of 
the  inclosed  newspaper  article.  While  the  President  does  not  for  a  moment  suppose 
that  you  ever  uttered  the  language  it  imputes  to  you,  he  deems  it  well  to  take  this 
opportunity  to  say  that,  if  any  persons  have  been  employed  in  the  custom-house  upon 
representations  that  they  are  his  particular  friends  and  favorites,  he  hopes  they  may 
be  discharged ;  and,  that  if  any  persons  ever  apply  for  positions  under  you,  upon  such 
a  pretense,  he  requests  that  they  may  not  be  employed. 

I  am,  sir,  respectfully  yours, 

HORACE  PORTER. 

Hon.  Thomas  Murphy, 

Collector  of  Customs,  New  York  City. 

It  has  been  thought  by  some  an  extraordinary  thing  that  a  young 
man,  wholly  without  influence  in  the  politics  of  New  York,  and  with  no 
other  recommendation  but  that  of  well- attested  fitness  and  personal 
merit,  should  have  obtained  an  employment  so  lucrative  as  that  accorded 
to  Colonel  Leet  by  Collector  Grinnell.  Perhaps  such  events  are  un¬ 
usual,  but  they  clearly  are  not  impossible.  There  is  nothing  in  the  tes¬ 
timony,  and  nothing  in  the  known  character  of  Mr.  Grinnell,  to  convince 
the  committee  that  he  was  incapable  of  an  act  as  disinterested  and  judi¬ 
cious  as  the  preferment  of  Mr.  Leet  seems  to  have  been. 

The  fact,  it  must  be  confessed,  is  quite  at  variance  lyith  the  theory 
held  in  certain  quarters,  somewhat  vociferously,  that  under  this  admin¬ 
istration  political  merit  constitutes  the  only  claim  to  preferment,  and 
that  personal  merit  is  wholly  ignored.  But  the  fact  of  preferment  in 
the  case  of  Colonel  Leet  upon  the  ground  of  personal  merit  is  too  well 
attested  to  be  denied,  even  though  that  theory  should  be  exploded  by 
it.  The  attempt  has  been  made  to  explain  this  indubitable  fact  upon 
the  supposition  that  Colonel  Leet  was  associated  in  the  business  cov¬ 
ertly  with  some  parties  more  potential  than  himself.  Rumor — perhaps 
it  should  be  said  scandal — has  pointed  to  General  Horace  Porter  and  to 
General  O.  E.  Babcock  as  the  parties  likely  to  be  interested  with  Col¬ 
onel  Leet,  and  by  whom  he  was  upheld  in  the  favor  of  Mr.  Grinnell. 

The  committee  was  instructed  to  inquire  whether  any  such  parties 
were  interested  with  Colonel  Leet.  Very  searching  inquiry  has  been 
made.  The  testimony  wholly  fails  to  disclose  any  foundation  for  such 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XI 


a  suspicion.  On  the  contrary,  it  proves  as  conclusively  as  human  tes¬ 
timony  can  prove  anything  that  neither  Porter  nor  Babcock  had  any 
interest  whatever  with  Colonel  Leet.  Leet  testifies  positively  to  that 
fact.  Porter  and  Babcock,  severally,  deny  upon  their  oath  such  inter¬ 
est.  When  the  committee  was  in  New  York  Mr.  Grinnell  was  in  Eu¬ 
rope,  and  he  was  not  examined  before  it.  But  in  February,  1871,  he 
was  examined  upon  the  same  point  by  another  committee,  of  which  Sen¬ 
ator  Patterscfn,  of  New  Hampshire,  was  the  chairman.  He  had  then 
left  the  office  of  collector ;  he,  at  least,  had  no  inducement  to  perjure 
himself  for  the  protection  of  officers  about  the  White  House.  Neither 
have  the  committee  or  the  public  any  reason  to  believe  that  any  possible 
inducement  could  bend  Mr.  Grinnell  to  the  business  of  perjury.  From 
the  testimony  given  by  him  before  that  committee  the  following  extracts 
are  taken : 

Q.  Did  Mr.  Leet,  wlio,  in  connection  with  Mr.  Stocking,  now  holds  the  general-order 
business,  come  to  you  and  ask  to  have  one  of  these  general-order  stores? — A.  He  did 
come  to  me  and  intimated  to  me  he  would  like  to  be  interested  in  some  one  of  the  gen¬ 
eral-order  stores,  if  changes  were  to  be  made. 

Q.  Ity  whom  was  he  indorsed  ? — A.  I  do  not  know — by  a  large  number  of  Senators 
and  people,  beginning  with  the  President  and  going  down.  He  was  introduced  to  me 
as  a  military  man  of  respectability  and  standing.  There  were  no  allusions  in  those 
letters  to  any  appointment,  but  his  letters  were  very  strong  in  speaking  of  him  as  a 
man  of  character  and  respectability. 

Q.  Did  you  receive  a  letter  from  General  Porter,  the  President’s  private  secretary, 
or  from  the  President,  asking  you  to  give  Colonel  Leet  any  part  of  this  business? — A. 
Never— not  a  line  from  either. 

Q.  Did  Colonel  Leet  intimate  to  you  that  the  President  desired  that  you  should  give 
him  some  office  or  some  advantage  from  the  custom-house  business  ? — A.  I  inferred 
from  Colonel  Leet’s  conversation  that  if  it  was  in  my  power  to  do  anything  to  forward 
his  views  in  any  business,  he  having  retired  or  about  to  retire  from  the  Army,  it  would 
be  very  pleasant  and  agreeable  to  the  President.  I  inferred  all  that  from  Colonel  Leet’s 
conversation  with  me  and  through  people  who  talked  with  me.  Colonel  Leet,  on  the 
first  visit  to  New  York,  presented  to  me  a  letter  of  introduction  from  General  Grant, 
in  which  the  President  spoke  of  Colonel  Leet  as  one  having  served  with  him  in  the 
Army,  and  as  a  most  faithful  and  reliable  officer,  saying  that  Colonel  Leet  was  about 
to  retire  from  the  Army  and  was  anxious  to  locate  and  enter  upon  some  business  in  the 
city  of  New  York ;  if  it  was  in  my  power,  as  an  old  merchant,  to  do  anything  to  for¬ 
ward  his  views,  it  would  be  very  gratifying  to  him.  General  Grant.  That  is  the  only 
letter  or  communication  that  I  ever  received  from  the  President  bearing  directly  or  in¬ 
directly  ou  Colonel  Leet. 

I 

Previous  to  that  testimony,  tvlien  General  Porter  appealed  to  Mr. 
Grinnell  against  the  injurious  allegations  of  Mr.  Mudgett,  Mr.  Grinnell 
wrote  to  General  Porter  a  letter  in  the  terms  following : 

Custom-House,  New  York,  May  3, 1870. 

My  Dear  General  Porter  :  I  was  sorry  that  you  could  not  spend  a  longer  time 
with  me  on  Saturday,  as  you  left  me  with  the  impression  on  my  mind  that  you  had  not 
fully  freed  yours  upon  the  subject  of  our  conversation. 

So  far  as  the  rumors  and  insinuations  as  to  people  being  interested  in  contracts  con¬ 
nected  with  the  custom-house  here  affect  me,  I  pay  no  attention  to  them.  So  far  as 
such  rumors  have  been  brought  to  my  attention,  as  affecting  yourself  and  your  asso¬ 
ciates,  no  man  has  been  more  outspoken  and  earnest  in  denying  'them,  both  in  public 
and  private,  than  I  have  been.  I  know  that  you  are  not  in  any  way  interested  in  any 
contract  given  out  here,  and  neither  you  nor  any  other  person  about  tho  Executive 
Mansion  has  ever  intimated  a  desire  to  be  so  interested.  Many  applications  for  such 
contracts  were  of  course  made  to  me,  and  men  were  strongly  urged  by  Senators  and 
Representatives,  but,  so  far  as  I  know  or  believe,  from  no  improper  motives.  They  were 
awarded  to  those  whom  I  considered  to  be  good  men  and  deserving  of  them.  People 
who  are  complaining,  and  circulating  rumors,  or  some  of  them,  are,  perliai)S,  those  who 
failed  to  obtain  general-order  or  other  contracts. 

I  write  this  that  you  may  feel  perfectly  assured  that  no  word  or  suggestion  has  been 
made  by  me  which  could  authorize  any  oiae  in  entertaining  the  idea  for  a  moment 


XII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


that  you  were,  iu  any  way,  shape,  or  manner,  interested  or  concerned  in  any  contract, 
or  that  any  had  been  awarded  in  deference  to  requests  from  parties  in  the  Executive 
Mansion. 

I  am,  very  truly,  your  friend, 

M.  H.  GRINNELL. 

General  Horace  Porter. 

No  witness  appeared  to  testify  to  the  contrary  of  this.  Only  two 
witnesses  were  found  to  avow  a  belief  in  the  connection  of  either  Por¬ 
ter  or  Babcock  with  the  general-order  business.  A  belief  more  irra¬ 
tional  it  would  be  difficult  to  invent.  Men  are  unapt  to  divide  their 
earnings  with  those  who  do  not  share  in  the  labors  and  risks  from 
which  the  earnings  are  derived.  One  who  should  assert  the  belief  that  Mr. 
A.  T.  Stewart  divided  his  profits  with  Porter  or  with  Babcock,  would 
be  pronounced  absurd  without  listening  to  any  testimony  in  contradic¬ 
tion.  If  he  should  continue  to  assert  that  belief  after  Porter  and  Bab¬ 
cock  and  Stewart  had  upon  oath  contradicted  the  assertion,  he  would 
be  thought  insane.  And  yet  Mr.  Stewart  can  probably  much  better 
afford  to  make  such  division  than  could  Leet  &  Stocking.  If  it  is  urged 
that  Leet  &  Stocking  are  the  friends  of  Porter  and  Babcock,  whilst 
Stewart  is  not,  it  may  be  answered,  first,  that  such  extraordinary  con¬ 
duct  cannot  be  explained  upon  the  ground  of  personal  friendship.  Men 
do  not  work  and  divide  their  earnings  with  their  friends.  Second,  there 
is  no  evidence  that  Mr.  Stocking  was  the  friend  of  either  Porter  or 
Babcock.  He  himself  says  he  had  but  a  mere  bowing  acquaintance  with 
General  Porter.  There  does  not  seem  to  be  any  hypothesis  upon  which 
such  a  division  could  be  explained,  unless  it  be  that  Leet  &  Stocking 
held  their  storage  under  the  influence  of  Porter  or  Babqock.  But  the 
evidence  repudiates  that  pretext.  A  part  of  the  general-order  business 
held  by  Leet  &  Stocking  was  the  portion  assigned  to  Bixby  and  Leet 
in  1869  by  Mr.  Grinnell.  Mr.  Leet  denies  upon  his  oath  that  either 
Porter  or  Babcock  had  any  agency  in  procuring  that  business  for  them. 
If  his  testimony,  in  the  absence  of  contradiction,  requires  corroboration, 
it  is  corroborated  by  the  sworn  testimony  of  Messrs.  Porter  and  Bab¬ 
cock,  who  severally  declare  not  only  that  they  had  no  agency  in  pro¬ 
curing  that  business  for  Leet,  but  that  they  did  not  know  he  had  it 
until  long  after  the  connection  between  Leet  and  Bixby  had  been  dis¬ 
solved.  If  all  this  testimony,  in  the  absence  of  contradiction,  requires 
corroboration,  it  is  corroborated  by  the  testimony  of  Mr.  Grinnell, 
already  quoted,  who  not  only  denies  the  agency  of  Porter  and  Bab¬ 
cock,  but  plainly  narrates  why  he  assigned  the  business  to  Leet  and 
Bixby.  If  corroboration  is  still  needed,  corroboration  is  still  found  in 
the  fact  that  the  same  business  which  was  assigned  to  Leet  and  Bixby 
in  July,  1869,  was  assigned  to  Leet,  Horton,  and  Stocking  in  June, 
1870.  Each  of  those  men  seem  to  have  been  about  equally  powerless 
in  the  politics  of  New  York.  Leet  is  the  only  one  who  is  suspected  of 
having  any  influence  with  Porter  or  Babcock.  No  one  can  easily  be¬ 
lieve  that  Horton  and  Stocking  would  have  consented  to  divide  their 
profits  with  two  such  comparative  strangers  as  were  Porter  and  Bab¬ 
cock  ;  and  no  one  who  lias  read  the  testimony  given  by  Mr.  Horton  be¬ 
fore  the  Joint  Select  Committee  on  Retrenchment  can  possibly  believe 
that  if  he  had  made  such  a  division  he  would  have  failed  to  tell  of  it. 

The  rest  of  the  general-order  business  held  by  Leet  &  Stocking  last 
February  was  that  to  which  they  succeeded  in  September,  1870,  upon 
the  failure  of  Mason  &  Go.  It  would  seem  morally  impossible  that 
either  Porter  or  Babcock  could  have  any  agency  in  directing  that  por¬ 
tion  to  them.  When  Mason  &  Co.  were  found  in  default,  and  it  became 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XIII 


necessary  to  close  their  store,  it  was  found  necessary  to  provide  storage 
for  the  merchandise  that  wras  hourly  coming  to  it  at  once.  There  was 
no  time  for  the  collector  to  communicate  with  or  to  learn  the  wishes  of 
any  one  in  Washington.  This  sufficiently  appears  from  the  testimony 
of  Mr.  Murphy,  Colonel  Stocking,  and  of  Ex-Inspector  William  D. 
Prentice.  (Vol.  1,  p.  646  ;  vol.  2,  p.  362 ;  vol.  3,  p.  348.) 

Yet,  in  spite  of  all  this  testimony,  two  witnesses  were  found  who  pro¬ 
fessed  to  believe  that  not  only  Colonel  Leet  but  that  Leet  &  Stocking 
divided  the  profits  of  their  business  with  General  Porter.  Those  two 
witnesses  were  Mr.  Horace  Greeley  and  Mr.  Benjamin  E.  Mudgett.  One 
man  only  was  found  who  avowed  the  belief  that  General  Babcock 
shared  in  those  profits.  That  one  believer  was  Mr.  Horace  Greeley. 

It  seems  proper  to  examine  the  grounds  upon  which  rests  a  faith 
which  is  cherished  not  only  without  any  evidence,  but,  as  has  been  seen, 
in  spite  of  a  great  deal  of  evidence.  Mr.  Greeley  testified  as  follows  : 

By  Mr.  Cassekly  : 

Question.  Do  you  know,  or  not,  whether  the  subject  of  the  general-order  business,  as 
it  is  called,  excites  much  complaint  among  business  men  in  this  city  ? — Answer.  I  know 
it  excites  complaint,  but  I  hear  more  of  it  on  its  political  side  than  its  business  side. 
It  is  a  very  rotten  business,  in  my  judgment,  from  all  I  hear. 

Q.  You  hear  of  complaints  in  both  aspects — the  business  aspect  and  the  political 
aspect? — A.  Yes,  sir;  but  more  in  regard  to  the  fact  that  individuals  who  have  no  right 
to  make  money  are  making  large  sums  of  money  out  of  it,  who  are  silent  partners  of 
those  who  control  general  orders  and  cartage. 

Q.  Who  are  those  individuals? — A.  I  would  not  like  to  testify.  I  think  General 
Porter,  of  the  White  House,  is  one,  and  also  General  Babcock  is,  but  I  know  no  facts 
to  prove  it. 

Q.  But  the  general  judgment  which  you  formed  as  the  result  of  what  you  ascer¬ 
tained  from  those  who  were  supposed  to  be  informed  themselves,  and  otherwise,  is  that 
it  is  a  very  rotten  business,  and  that  there  are  persons  deriving  a  revenue  from  it  who 
have  no  right  to  derive  it? — A.  Yes,  sir. 

On  being  questioned  later  by  Mr.  Howe,  b.e  testified  as  follows: 

Q.  You  gave  it  as  your  opinion  that  General  Porter  and  General  Babcock  were  shar¬ 
ing  in  the  proceeds  of  what  is  known  as  the  general-order  business? — A.  I  have  been 
so  informed.  I  think  yon  will  find  that  others  know  more  than  I  do.  Somebody  asked 
me  if. I  supposed  there  w^'e  others,  and  I  said  I  supposed  there  were.  I  was  then 
asked  to  name  them,  and  I  named  those  two. 

Q.  Will  you  give  me  your  informant? — A.  I  think  the  gentleman  whose  name  I  gave, 
Mr.  Lindsay,  can  throw  some  light  on  that  subject. 

Q.  Is  he  the  man  who  told  you  that  these  gentlemen  were  interested? — A.  No,  sir; 
he  Is  not  the  person.  I  don’t  know  him,  but  his  name  was  given  me  by  a  person  who 
gave  me  some  information  on  the  subject. 

Q.  Tell  me  who  your  informant  was. — A.  I  think  Mr.  Charles  A.  Lamont  told  me. 

Q.  That  is  the  only  information  you  have? — A.  I  cannot  name  another  person  now. 

Q.  Does  he  reside  in  this  city? — A.  Yes,  sir;  at  134  West  Twenty-fourth  street.  His 
business  place  is  141  Chambers  street,  I  think. 

Mr.  Greeley,  it  will  be  observed,  does  not  say  that  Mr.  Lindsay  in¬ 
formed  him  that  Leet  divided  his  earnings  with  Porter  and  Babcock. 
He  does  not  say  that  Lindsay  informed  Mr.  Charles  A.  Lamont  to  that 
effect,  ne  does  not  even  say  that  Mr.  Charles  A.  Lamont  told  him  that 
Mr.  Lindsay  had  informed  him  of  such  a  division.  Precisely  what  it 
was  that  Mr.  Lamont  told  Mr.  Greeley  could  be  learned  from  Mr.  Lind¬ 
say  is  not  discovered.  But  it  is  discovered  that  Mr.  Greeley’s  belief  rests 
upon  some  revelation  made  by  Mr.  Lindsay  through  Mr.  Lamont,  and 
it  is  likewise  very  clearly  discovered  that  if  Mr.  Lindsay  revealed  to 
Mr.  Lamont  the  idea  that  Leet  or  Stocking  divided  their  earnings  with 
Porter  or  Babcock,  he  revealed  an  idea  which  he  did  not  himself  enter¬ 
tain. 

Mr.  Lindsay  was  examined  upon  that  very  point.  After  a  long  ex¬ 
amination,  in  the  course  of  which  he  was  understood  to  intimate  an 


XIV 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


opinion  that  Babcock  and  Porter  were  interested  in  the  general-order 
business,  the  examination  was  continued  by  the  chairman,  as  follows : 

Q.  I  understand  you  to  say  that  you  understood  that  Mr.  Leet,  General  Babcock,  and 
General  Porter  were  interested  in  this  business,  and  yet  in  no  instance  was  that  infor¬ 
mation  communicated  to  you  by  Colonel  Leet. 

The  Witness.  What  did  you  understand  me  to  say! 

The  Chairman.  I  understood  you  to  say  that  Leet,  Babcock,  and  Porter  were  inter¬ 
ested  in  this  business ;  that  that  was  your  impression. — A.  Not  in  this  business.  In 
the  mess  to  which  I  referred. 

Q.  What  do  you  mean  by  the  mess  ? — A.  The  mess  where  they  boarded  in  Washing¬ 
ton  ;  their  hoarding-house. 

Q.  What  connection  has  the  mess  with  this  custom-house  f — A.  With  this  fund.  I 
was  asked  the  question  if  I  had  any  knowledge  of  their  having  been  together  in  Wash¬ 
ington  ;  I  answered  that  I  had,  of  these  three  parties ;  but  in  no  instance  did  I  ever 
hear  from  Mr.  Leet  that  Porter  or  Babcock  had  any  interest  in  the  fund  derived  from 
the  general-order  business. 

Q.  Have  you  any  idea  now  whether  Babcock  and  Porter  had  any  interest  in  it  ? — A. 
Emphatically  no ;  I  have  no  such  idea.  *• 

Subsequently  the  same  witness,  in  reply  to  Mr.  Howe,  answered  as 
follows : 

Q.  Then  the  result  of  your  statement  is,  that  while  you  did  understand  from  Mr. 
Leet  that  his  receipts  from  the  general-order  business  were  not  equal  to  the  discharge 
of  his  portion  of  the  expenses  of  the  mess,  you  never  did  understand  from  him,  nor 
from  anybody  else,  nor  have  you  any  idea  now,  that  General  Porter  or  General  Bab¬ 
cock,  who  were  his  partners  in  the  mess,  as  you  understood,  had  any  interest  in  the 
general-order  business  ? — A.  Emphatically  no ;  I  have  never  thought  "for  one  moment 
that  either  one  of  those  two  men  had  a  particle  of  interest  in  the  general-order  busi¬ 
ness. 

Mr.  Mudgett  seems  to  have  embraced  a  faith  somewhat  different  from 
that  of  Mr.  Greeley,  and  for  reasons  very  different.  Mr.  Mudgett  was 
first  examined  before  the  committee  on  the  16th  of  January,  1872. — 
(Vol.  1,  pp.  453,  454,  455.) 

In  the  testimony  then  given  he  presented  two  somewhat  conflicting 
theories,  resting  upon  two.  distinct  revelations. 

The  first  was  that  Mason,  Leet,  Porter,  and  Lindsay  were  mutually 
interested  in  an  endeavor  to  secure  the  general-order  business ;  that 
Judge  Louis  Dent  was  the  patron  through  whose  efforts  they  expected 
to  obtain  it ;  and  this  theory  was  revealed  to  the  Vitness  by  Mr.  Eodney 
J.  Mason.  The  second  theory  was  that  Porter,  Leet,  and  Lindsay  were 
the  parties  interested;  that  Porter  was  the  patron,  and  this  rested  upon 
the  revelations  of  O.  B.  Matteson  and  J.  B.  Taylor.  It  is  deserving  of 
notice  that  Mr.  Mudgett  first  stated  the  assignment  to  Porter,  Leet,  and 
Lindsay  as  communicated  to  himself  and  Mr.  Taylor  by  Mr.  Matteson. 
Immediately  afterward  he  stated  the  same  thing  as  a  fact  communicated 
to  himself,  apparently  at  the  same  time,  by  both  Mr.  Matteson  and  Mr. 
Taylor. 

On  the  26th  of  January  Mr.  Mudgett  reappeared  upon  the  witness 
stand.  (Vol.  2,  pp.  212,  215,  216,  220,  224,  228,  229,  230,  and  231.) 

According  to  the  testimony  then  given,  Mr.  Mudgett’s  faith  hacl  been 
materially  narrowed  in  the  course  of  ten  days,  and  during  the  same 
time  he  seems  to  have  materially  enlarged  the  testimony  on  which  that 
faith  rested.  In  that  testimony  he  seems  to  have  dismissed  the  idea 
that  there  was  any  mutuality  of  interest  between  Mason  and  Leet.  He 
repudiated  the  idea  that  Babcock  bad  any  concern  whatever  with  the 
business.  He  recanted  the  opinion  that  Lindsay  had  any  interest  with 
Leet,  because  Lindsay  had  denied  it,  but  he  adhered  to  the  belief  that 
Porter  was  interested ;  and  he  assigned  as  the  ground  of  that  conviction, 
first,  Leet’s  statement  to  himself  in  1870  to  the  effect  that  he  had  “a 
man  who  could  put  his  hand  on  Bout-well’s  shoulder.”  Second,  some¬ 
thing  said,  not  by  Matteson  and  Taylor,  but  by  Matteson  or  Taylor. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XV 


Third,  something  read  in  the  New  York  Sun ;  he  does  not  say  what. 
Fourth,  something  said  by  Henry  M.  Williams;  he  don’t  remember 
what.  And  fifth,  his  “own  judgment  of  what  he  heard  of  the  circum¬ 
stances  of  the  case.” 

The  declaration  attributed  to  Colonel  Leet,  to  the  effect  that  he  had 
a  man  who  could  put  his  hand  on  Mr.  Boutwell’s  shoulder,  considered 
as  a  reason  for  believing  Porter  to  be  interested  in  the  general-order 
business,  is  materially  impaired  by  the  fact  that  the  testimony  wholly 
fails  to  disclose  who  that  person  was.  On  the  contrary,  it  shows  very 
conclusively  that  Colonel  Leet  had  no  such  person  in  his  possession.  It 
is  also  impaired  by  the  fact  that  Colonel  Leet  denies  very  emphatically, 
on  his  oath,  that  he  ever  said  any  such  thing.  It  is  further  impaired 
by  the  consideration  that  when  Mr.  Mudgett  was  first  examined  he  did 
not  enumerate  such  a  declaration  as  a  ground  of  belief,  nor  make  any 
reference  to  it  whatever.  He  explains  that  omission  by  saying  that  on 
his  first  examination  he  was  not  questioned  in  reference  to  such  a  dec¬ 
laration.  But  as  on  his  second  appearance  he  introduced  the  declara¬ 
tion  without  being  questioned  about  it,  and  as  on  his  first  examination 
he  was  called  upon  to  assign  thp  reasons  for  the  belief  he  then  avowed, 
the  committee  can  discover  no  insuperable  difficulty  in  the  way  of  his 
then  mentioning  this  declaration,  if,  in  fact,  it  did  influence  his  belief. 

The  statement  attributed  to  Mr.  Matteson  or  to  Mr.  Taylor,  con¬ 
sidered  as  a  ground  for  this  eccentric  belief,  is  somewhat  impaired  by 
the  fact  that  in  his  former  testimony  he  had  attributed  the  same  state¬ 
ment  to  Mr.  Matteson  and  Mr.  Taylor.  It  is  also  impaired  by  the  fact 
that  these  statements,  so  far  as  Mr.  Mudgett  reveals  them,  are  quite 
inconsistent  with  the  testimony  of  Mr.  Grinnell  himself,  given  before 
the  Committee  on  Ketrenchment. 

The  article  attributed  to  the  New  York  Sun,  considered  as  a  ground 
of  belief,  is  somewhat  impaired,  though  perhaps  not  materially,  by 
the  fact  that  we  do  not  know  what  the  article  was. 

Likewise  the  declaration  of  Mr.  Williams  might  have  more  influence 
upon  the  judgment  of  the  committee  if  the  witness  was  able  to  remem¬ 
ber  it.  It  is  hardly  necessary  to  add,  that  however  controlling  Mr. 
Mudgett’s  “judgment  of  what  he  knew  of  the  circumstances  of  the 
case”  might  have  been  in  molding  his  own  belief,  it  could  hardly  be 
expected  to  control  the  belief  of  the  committee.  It  has  already  been 
remarked  that  Mr.  Mudgett  in  his  second  examination  acquitted  Mr. 
Lindsay  of  all  participation  in  the  general-order  business  because  Mr. 
Lindsay  denied  it,  and  he  saw  no  reason  for  disbelieving  it.  But  he 
refused  to  acquit  General  Porter  of  such  participation  although  the  lat¬ 
ter  also  denied  it.  The  reason  he  assigned  for  thus  discrediting 
the  testimony  of  General  Porter  is  that  the  latter  had,  in  conver¬ 
sation  with  the  witness,  declared  that  he  did  not  knowT  Mr. 
Lindsay;  whereas  the  witness  was  satisfied  that  he  did  know  him 
very  well.  But  the  committee  is  satisfied  that,  however  General 
Porter’s  denial  of  an  acquaintance  with  Mr.  Lindsay  may  affect  the 
credit  to  be  given  his  denial  of  all  share  in  the  general-order  busi¬ 
ness,  such  statement  does  not  affect  at  all  the  credit  to  be  given 
to  the  denial  of  Colonel  Leet,  and  of  Mr.  Grinnell,  to  the  same  effect. 
Nor  would  it  be  quite  safe  to  conclude,  because  a  man  had  in  conversa¬ 
tion  misstated  an  immaterial  fact,  that  his  sworn  affirmation  of  another 
and  material  fact  should  be  wholly  disregarded. 

Mr.  Mudgett’s  own  experience  should  have  cautioned  him  against  so 
harsh  a  rule  of  judgment.  It  appears  from  the  record  in  the  case  of 
the  Bank  of  the  Commonwealth  vs.  Mudgett,  tried  and  determined  in 


XVI 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


the  courts  of  New  York,  that  Mr.  Mudgett  himself  declared,  upon  his 
oath,  that  he  did  not  indorse  a  certain  note  of  hand,  whereas  the  jury 
upon  their  oaths  declared  that  he  did  indorse  it.  Yet  Mr.  Mudgett 
would,  doubtless,  think  it  unreasonable  to  conclude,  from  that  single 
circumstance,  either  that  he  or  that  the  gentlemen  composing  the  jury 
could  never  be  believed  on  any  matter. 

And  besides,  if  Mr.  Mudgett’s  rule  is  to  obtain,  instead  of  discredit¬ 
ing  General  Porter  for  having  falsely  stated  that  he  did  not  know  Lind¬ 
say,  it  w  ould  seem  to  be  necessary  to  discredit  Mudgett  himself  for  hav¬ 
ing  falsely  .sworn  that  Porter  made  such  a  statement,  for  Porter  denies 
that  he  made  it.  He  declares  upon  oath  that  he  did  not  deny  an  ac¬ 
quaintance  with  Lindsay,  but  that  he  denied  an  intimate  acquaintance 
with  him.  No  one  corroborates  Mr.  Mudgett,  whereas  General  John 
Cochrane,  who  was  present  at  the  interview  when  the  denial  was  made, 
if  at  all,  does  corroborate  General  Porter. 

On  the  whole,  the  committee  cannot  accept  the  avowed  belief  of  Mr. 
Greeley  and  Mr.  Mudgett  against  the  testimony  of  Porter,  Babcock, 
Leet,  Stocking,  and  Grinnell.  It  seems  altogether  more  rational  to  con¬ 
clude  that  Mr.  Greeley  or  even  Mr.  Mudgett  are  mistaken  in  an  opin¬ 
ion  borrowed  only  from  the  scandal  of  a  great  brawling  city  than  that 
Leet,  Stocking,  Porter,  Babcock,  Murphy,  and  Grinnell  have  committed 
willful  perjury. 

General  Porter  and  General  Babcock  must  stand  acquitted  of  all  par¬ 
ticipation  in  the  profits  of  storing  unclaimed  goods.  Colonel  Leet  and 
Mr.  Stocking  must  stand  acquitted  of  all  blame  for  seeking  that  trust 
as  well  as  for  accepting  it  when  assigned  to  them. 

The  complaints  which  have  been  preferred  against  the  administration 
of  Messrs.  Leet  &  Stocking  are  three :  Pirst,  that  they  have  not  kept 
the  goods  sent  to  them  securely;  second,  that  they  have  not  delivered 
them  promptly ;  third,  that  they  have  charged  exorbitantly.  In  refer¬ 
ence  to  the  first  complaint  it  is  perhaps  difficult  to  determine  as  matter 
of  law  how  far  the  warehouseman  is  responsible  for  the  safe  keeping  of 
unclaimed  goods.  But,  as  a  matter  of  fact,  it  is  evident  that  merchan¬ 
dise  lias  been  very  secure  in  the  store  of  Leet  &  Stocking.  Heavy  losses 
have  at  times  occurred  to  goods  in  other  buildings,  but  the  evidence 
does  not  warrant  the  conclusion  that,  of  all  the  millions  in  value  which 
have  passed  through  the  stores  of  Leet  &  Stocking,  a  single  dollar  has 
been  lost  from  them.  Mr.  A.  T.  Stewart  says  he  never  lost  any  goods 
nor  heard  of  the  loss  of  any.  Mr.  Downs,  the  clerk  of  Claflin  &  Co., 
says  that  in  point  of  security  they  have  nothing  to  complain  of.  Mr. 
Dale,  the  agent  of  the  Inman  line,  and  Mr.  Hurst,  of  the  National  line, 
severally  affirm  the  same  view.  Mr.  Leet  and  Mr.  Stocking  declare, 
upon  oath,  that  no  goods  have  ever  been  lost  from  their  stores.  Mr.  Van 
Saun,  their  experienced  superintendent,  testified  that  no  losses  had 
occurred.  It  is  certain  that  no  package  had  been  lost,  because  if  it  had 
been  the  books  of  the  store-keeper  would  show  the  fact.  A  few  com¬ 
plaints  were  made  of  the  loss  of  goods  from  packages.  Mr.  Pohalski, 
of  the  firm  of  P.  Pohalski  &  Co.,  importers  of  cigars,  claim’s  to  have  lost 
from  three  hundred  to  five  hundred  cigars  out  of  the  last  three  or  four 
invoices.  When  asked  where  the  losses  occurred  he  answered: 

To  the  best  of  my  belief  in  general  orders,  and  a  portion  in  the  warehouse. 

All  he  knew  of  the  matter  was  that,  while  the  cigars  were  in  the  gen¬ 
eral-order  store,  the  store-keeper  called  his  attention  to  the  fact  that 
from  two  hundred  and  fifty  to  three  hundred  cigars  had  been  abstracted. 
Whether  they  were  abstracted  in  the  store,  on  the  truck,  or  on  ship¬ 
board,  of  course  he  could  not  tell.  After  the  cigars  were  removed  to 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XVII 


the  bonded  warehouse  some  two  hundred  and  fifty  or  three  hundred 
more  were  taken. 

Mr.  John  Weber,  of  Philadelphia,  also  informed  the  committee  by  let¬ 
ter  that  two  packages  of  hosiery,  received  by  him  by  rail  from  New 
York,  had  been  opened.  From  one  case  goods  to  the  value  of  $10.69, 
and  from  the  other  to  the  value  of  $11.58,  were  taken.  He  says  he 
tried  to  hold  the  railroad  company  responsible,  but  he  learned  that  the 
package  had  been  received  from  the  ship  in  good  order  by  Leet  & 
Stocking,  and  had  been  delivered  to  the  railroad  in  bad  order. 

Mr.  Lewishon,  of  the  firm  of  Lewislion  Brothers,  also  claims  to  have 
lost  from  Leet  &  Stocking’s  store  some  hair,  valued  at  013  Prussian 
thalers.  Leet  &  Co.  denied  their  liability  for  the  losses,  and  suit  was 
commenced  to  recover  their  value.  That  suit  was  not  determined  when 
Mr/  Lewishon  gave  his  testimony. 

Concerning  the  liability  of  goods  to  such  pilfering  while  in  Leet  & 
Co.’s  stores,  Mr.  Van  Saun  testified  as  follows  in  answer  to  Mr.  Pratt: 

Q.  It  lias  been  stated  that  pillaging  of  packages  may  take  place  in  your  store ;  that 
a  man  could  be  lost  in  those  rooms,  and  could  be  hid  in  those  long  passages,  between 
the  tiers  of  packages,  for  hours,  and  not  be  discovered  by  any  one.  What  is  the  fact 
in  relation  to  that? — A.  It  would  be  impossible.  In  the  first  place,  we  have  a  number 
of  men  in  the  store  all  the  time — twenty  meu.  The  clerks  are  running  through  the 
store  in  all  directions,  and  besides  that  we  allow  the  carmen  whom  we  know,  when 
they  come  to  present  a  permit  for  goods,  instead  of  keeping  them  standing  down-stairs 
waiting,  the  privilege,  if  they  desire  it,  of  going  and  looking  for  their  own  goods.  If 
a  man  v'as  going  to  steal  he  would  have  to  have  a  good  many  in  with  him. 

Q.  Do  you  say  the  thing  would  be  impossible  in  those  stores  ? — A.  I  say  it  would  be. 

Q.  What  cases  of  pillage  have  occurred  since  Leet  &  Stocking  have  had  the  busi¬ 
ness  ? — A.  None,  in  our  store. 

Still,  in  spite  of  the  testimony,  it  is  possible  that  goods  may  be  plun¬ 
dered  while  iu  Leet  &  Co.’s  stores.  It  is  possible  that  they  have  been 
so  plundered.  But  in  the  light  of  this  testimony  no  one  will  affirm  that 
the  security  in  those  stores  is  not  as  ample  as  in  any  other.  Some  com¬ 
plaint  was  also  made  of  delay  in  getting  merchandise  away  from  the 
stores  when  sent  for  by  the  merchants.  But  witnesses  differed  not  only 
as  to  the  fact  of  such  delay,  but  as  to  the  cause  of  it.  Mr.  Stewart  and 
his  ctaef  clerk,  Mr.  Cooper,  attributed  the  delay  to  the  fact  that  so  many 
goods  were  sent  to  these  stores.  They  argued  that  if  more  stores  were 
employed  packages  would  not  get  buried  under  such  masses,  and  so 
would  be  more  readily  broken  out.  But  that  theory,  although  plausible, 
was  very  early  exploded. 

Witnesses  better  informed  testified  that  the  warehouses  occupied  by 
Leet  &  Stocking  were  divided  into  stories,  and  that  merchandise  in 
each  story  was  piled,  not  in  masses,  but  in  tiers,  of  no  more  than  two 
packages  in  thickness,  and  of  not  more  than  three  or  four  in  depth, 
with  alleys  between  each  two  tiers,  through  which  laborers  could  pass 
with  their  hand-trucks.  No  matter  how  many  packages  may  be  in  the 
building;  each  is  placed  in  some  one  of  those  tiers  with  the  descriptive 
marks  turned  out  to  the  alley. 

Its  precise  location  in  the  store  is  minuted  in  the  book  containing 
the  charge  for  storage.  So,  w hen  the  carman  applies  for  a  single  pack¬ 
age,  he  learns  at  the  time  he  pays  the  charges  on  which  floor  the 
package  is,  and  in  w  hich  tier  it  is  upon  that  floor.  He  can  go  to  it  as 
directly  as  to  the  City  Hall :  and  when  at  it,  although  it  be  the  bottom 
one  in  the  tier,  he  has  but  two  or  three  packages  to  take  down  from  the 
top  of  it.  A  personal  inspection  of  one  of  the  warehouses,  made  by  the 
committee,  corroborated  this  testimony. 

Mr.  Downs,  the  clerk  of  H.  B.  Claflin  &  Co.,  explained  the  delay  upon 
the  theory,  not  that  the  goods  could  not  readily  be  found  in  and  got  out 
S.  Rep.  227 - n 


XVIII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


of  tlie  warehouses,  but  that  so  many  carts  were  sent  at  the  same  time 
for  goods,  some  of  them  would  be  obliged  to  wait  a  long  time  before 
reaching  the  door.  There  is  little  reason  to  doubt  but  that  some  delay 
is  sometimes  occasioned  from  that  cause.  But  there  are  three  consid¬ 
erations  which  compel  the  committee  to  the  conclusion  that  the  suffer¬ 
ing  cannot  be  great  from  such  delays :  First.  The  warehouses,  no 
matter  how  large,  are  built  to  be  occupied.  If  there  is  but  a  single  car¬ 
load  of  general-order  goods  in  them  the  owner  will  endeavor  to  fill  the 
balance  of  the  space  with  bonded  goods,  and  so  long  as  large  quantities 
of  goods  are  in  the  building  many  carts  are  likely  to  visit  it  at  the  same 
time.  Second.  The  remedy  for  this  alleged  delay  is  so  simple  that  it 
seems  incredible  it  should  not  be  applied  if  the  suffering  is  so  great. 
That  remedy  does  not  call  for  opening  new  stores,  but  simply  for  open¬ 
ing  other  doors  in  the  existing  stores.  One  of  the  warehouses  occupied 
by  Leet  &  Stocking  has  fourteen  doors,  from  which  goods  might  be 
delivered  merely  by  placing  a  store  keeper  at  them.  And  if  the  mer¬ 
chants  demanded  such  additional  facilities,  it  cannot  be  doubted  the 
collector  would  accord  them.  Third.  This  complaint  is  urged  really 
only  on  behalf  of  Messrs.  Stewart  &  Co.  and  H.  B.  Claflin  &  Co. 

Mr.  Tillotson  and  Mr.  Bloomfield,  both  importers,  severally  say  they 
have  no  complaint  to  make  of  delay. 

Mr.  Pohalski  says  he  has  not  been  delayed,  except  when  a  truck  got 
to  the  door  ahead  of  his. 

Mr.  Hutton,  it  is  true,  complains  of  a  delay,  and  as  his  testimony  on 
the  point  is  sui  generis ,  it  is  quoted  : 

By  Mr.  Bayard  : 

Q.  In  having  yonr  goods  sent  to  the  general-order  stores,  have  you  experienced  any 
inconvenience,  by  way  of  delay,  in  getting  your  goods  when  you  called  for  them? — A. 
Sometimes  very  great. 

Q.  How  long  have  yon  known  your  man  to  he  waiting  before  he  could  get  the  goods 
delivered  to  him  ? — A.  I  cannot  say  precisely,  hut  some  days  in  several  instances. 

Q.  Waiting  several  days  to  receive - ? — A.  To  receive  goods. 

Q.  At  the  general-order  stores  ? — A.  Yes,  6ir  ;  in  some  instances. 

Q.  Have  you  had  from  your  carman  a  good  deal  of  complaint  of  such  delay  ? — A.  No, 
sir ;  his  complaint  does  not  come  to  me. 

Q.  I  mean  to  your  house. — A.  We  have  complained,  and  that  has  been  his  excuse. 

A  delay  of  days  in  getting  goods  from  the  store  is  an  experience  re¬ 
cited  by  no  one  but  Mr.  Hutton’s  cartman ;  and  as  he  did  not  complain  of 
it,  but  only  pleaded  it  in  self-defense  when  complained  of,  it  would  be 
hardly  fair  to  enter  judgment  against  Leet  &  Stocking  upon  that  plea. 
On  the  contrary,  Leet&  Stocking  and  Van  Saun  join  with  Tillotson  and 
Bloomfield  in  denying  the  delay,  while  Mr.  Dale  pronounces  the  ware¬ 
house  which  receives  the  goods  from  his  (the  Inman)  line  to  be  the 
most  convenient  he  knew  on  this  side  of  the  water. 

But  it  is  evident  that  if  there  is  delay  in  getting  goods  from  the  ware¬ 
house,  that  delay  would  be  felt,  not  by  the  merchants,  but  by  the  car¬ 
men.  To  the  merchant  it  can  make  but  little  difference  whether  his 
carman  is  absent  one  hour  or  four  when  he  goes  for  a  load  of  goods. 
The  carman  works  not  by  the  hour  but  by  the  load.  If  he  is  delayed 
the  loss  is  his.  But  of  all  those  who  are  employed  in  New  York  to  cart 
goods,  but  one  appeared  to  testify  upon  the  subject  of  alleged  delay; 
that  one  was  Mr.  Henry  A.  Garrison,  who  carts  for  A.  T.  Stewart,  and 
who  says  he  has  been  engaged  in  the  business  since  that  early  day  when 
the  only  bonded  warehouse  was  on  the  corner  of  Broadway  and  Ex¬ 
change  Place.  He  testified  that  the  conveniences  for  getting  goods  out 
of  Leet  &  Stocking’s  stores  were  “  as  good  as  any  other  place;”  that  he 
never  had  “  any  delay  there;”  that  he  never  heard  any  complaint  of  delay 
from  Mr.  Stewart  or  Mr.  Cooper,  and  that  he  had  u  seen  a  train  stand 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XIX 


in  Jersey  City  nearly  all  morning  to  get  one  load.”  But  the  complaint 
most  commonly  and  most  vehemently  urged  against  the  administration 
of  Leet  &  Stocking  is  that  of  exorbitant  charges.  That  complaint  has 
been  widely  circulated  through  the  newspapers.  That  complaint  has 
been  repeatedly  heard  in  the  Senate  Chamber.  To  the  public  Leet  & 
Stocking  have  been  presented  as  a  sort  of  double-headed  vampire, 
foisted  upon  the  merchants  of  New  York  by  some  resistless  force,  to 
bleed  them,  without  other  control  than  that  of  their  own  insatiate  ap¬ 
petites.  A  more  monstrous  fiction  could  hardly  be  invented.  The  mer¬ 
chants  of  New  York  are  not  so  helpless.  They  are  subject  to  no  dis¬ 
abilities.  As  much  as  any  class  of  men  in  this  or  in  any  other  country, 
they  are  abundantly  able  to  vindicate  their  own  rights.  He  would  be 
a  bold,  as  well  as  a  bad,  collector  who  should  attempt  to  uphold  a  ware¬ 
houseman  in  the  practice  of  making  exorbitant  exactions  from  the 
merchants  of  New  York.  And  whether  he  did  or  did  not  have  the 
sanction  of  the  President  in  the  attempt,  his  term  of  office  would  be 
very  apt  to  be  brief  and  full  of  trouble.  The  testimony  reveals  Messrs. 
Leet  &  Stocking  in  a  very  different  light.  It  shows  them  to  be  two 
young  men  absolutely  without  political  importance  or  political  support, 
instead  of  having  powerful  friends  to  uphold  them  in  the  practice  of 
wrong,  they  are  without  protection  against  wrong,  except  such  as  their 
own  merits  secure  them  from  that  love  of  justice  and  fair-dealing  which 
characterizes  the  great  body  of  the  merchants  of  New  York. 

And  yet  witnesses  were  not  wanting  to  testify  to  habitual  and  gross 
exactions  on  the  part  of  Leet  &  Stocking.  Some  witnesses  swear  to 
that  who  should  have  known  better.  It  is  difficult  to  believe  that  some 
did  not  swear  to  it  who  did  know  better. 

Mr.  Newstadt,  the  first  witness  who  appeared  before  the  committee, 
came  to  complain  of  Leet  &  Stocking’s  charges.  Three  cases  belonging 
to  him  had  been  sent  to  the  general-order  store.  They  were  of  the  same 
kind.  On  one  case  the  charge  was  $1.50,  and  on  the  others  it  was  $2.50 
each.  Mr.  A.  T.  Stewart  made  use  of  the  following  extraordinary 
language : 

In  consequence  of  the  general-order  business  being  now  controlled  by  one  firm,  it 
has  become  a  monopoly,  and  the  charges  increased  to  $1.50  or  more  on  a  single  package, 
instead  of  about  half  the  rates  as  formerly,  which  difference  is  pure  loss  to  the  mer¬ 
chant.  Besides,  there  is  an  additional  extra  expense  of  cartage,  say  50  cents  per  case. 

His  clerk,  Mr.  Cooper,  testified  as  follows,  in  answer  to  Senator 
Casserly : 

Q.  What  I  want  to  get  from  you,  in  connection  with  that  table,  is  a  statement  of  the 
comparative  charges  for  the  same  services  now  and  under  the  system  which  pre¬ 
viously  prevailed. — A.  I  should  think  the  charges  are  at  least  double. 

Q.  For  the  same  package  and  the  same  service,  what  is  the  average  charge  now,  as 
compared  with  the  charge  under  prior  general-order  stores  ?— A.  I  say  I  should  think 
the  charges  are  at  least  double  now  what  they  were  then,  on  an  average. 

Mr.  Gustav  Schwab,  the  agent  of  the  North  German  Lloyds,  made 
the  following  declaration : 

In  fact  we  only  had  one  case  where  any  considerable  quantity  of  goods,  over  and 
above  the  usual  number  of  packages,  had  gone  under  general  order.  That  steamer 
arrived  on  Sunday,  July  16,  was  entered  on  Monday,  and  commenced  discharging  on 
Tuesday.  The  result  was  that  of  a  cargo  of  2,716  marked  packages,  not  counting 
boxes  of  tin  and  similar  bulky  goods,  694  packages  were  sent  to  general-order  store  in 
New  York,  on  which  we  refunded  to  tho  consignees  $583  for  cartage,  labor,  and 
a  few  days’  storage;  the  store-keeper’s  bills  being  made  out  at  $1.50  a  package,  whether 
large  or  small.  If  these  goods  had  been  placed  in  the  Hoboken  stores  an  outlay  of 
about  $50  would  have  been  all  the  expense  incurred  by  our  company. 

Mr.  Tillotson  testified  that  he  was  charged  by  Leet  &  Stocking, 
upon  coils  of  wire,  30  cents  per  coil  for  storage  and  labor;  that  upon 
appeal  to  the  collector  the  charge  was  reduced  to  20  cents ;  whereas,  at 


XX  NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 

the  bonded  warehouse  of  B.  B.  Livingston  &  Co.,  just  such  wire  was 
stored  at  5|  cents  per  coil. 

Mr.  Hutton  states  the  charges  at  two  or  three  times  as  much  as  those 
of  other  parties  for  similar  services. 

Mr.  Pohalski  stated  his  charges  on  cigars  to  be  $2.50  per  case. 

Now,  all  this  testimony  is  very  satisfactorily  explained,  or  conclu¬ 
sively  contradicted. 

Mr.  Newstadt’s  testimony  was  correct.  He  did  pay  $1.50  on  a  single 
case  of  general-order  goods,  and  he  did  pay  $2.50  on  two  other  similar 
cases.  But  the  explanation  is,  that  the  case  on  which  he  paid  the  $1.50 
was  entered  by  him,  and  withdrawn  by  himself  to  his  own  store.  The 
other  two  cases  were  taken  from  the  warehouse  to  the  public  store 
for  appraisal.  After  appraisal  he  should  have  taken  them  away, 
and  if  he  had  done,  so  the  general-order  charges  would  have  been  but 
$1.50  each.  But  he  did  not  take  them  away.  As  a  consequence 
they  were  sent  back  to  the  general-order  store.  Leet  &  Stock¬ 
ing  had  to  pay  for  the  return  cartage ;  had  to  replace  them  in  their 
warehouse  once  more,  and  once  more  deliver  them  out,  when  the  mer¬ 
chant  finally  got  ready  to  take  them  home.  For  that  extra  cartage 
and  labor  an  additional  dollar  per  case  was  charged.  Mr.  Newstadt 
rightfully  appealed  to  the  proper  bureau  in  the  custom-house  for  a  cor¬ 
rection  of  the  charge.  The  bureau  properly  declared  the  charge  cor¬ 
rect,  but,  it  would  seem,  failed  to  explain  to  Mr.  Newstadt  why  the 
additional  charge  w  as  made. 

But  Mr.  Stewart  was  wholly  mistaken  when  he  stated  that,  in  conse¬ 
quence  of  the  general-order  business  being  controlled  by  a  single  firm, 
it  had  become  a  monopoly,  and  the  charges  on  a  package  increased  to 
$1.50,  instead  of  half  those  rates,  besides  an  extra  charge  of  50  cents 
for  cartage.  He  himself  showed  that  the  charge  for  labor  and  storage 
alone,  without  cartage,  at  the  Cunard  company’s  stores,  was  $1  per 
case.  He  stated  the  charge  at  the  Hoboken  stores  for  labor  and  cart¬ 
age  at  75  cents  per  case,  but  in  that  he  was  doubtless  mistaken. 

Mr.  Schwab,  the  agent,  admits  the  ordinary  charge  to  have  been  $1, 
the  same  as  at  the  Cunard  stores. 

Now,  the  whole  testimony  shows  that  the  charge  for  storage  and  labor 
at  Leet  &  Stocking’s  was,  on  the  same  kind  of  goods — precisely  the 
same — $1  per  package. 

Mr.  Stewart  has  exhibited  to  the  committee  a  great  many  bills  paid  to 
Leet  &  Stocking,  and  in  all,  save  a  few  exceptional  cases,  the  charges 
were  $1.25  per  package,  $1.50,  or  $1.75.  But  these  charges  included 
not  labor  and  storage  alone,  but  also  the  sums  which  Leet  &  Co.  had 
paid  for  cartage  from  the  steamer  to  the  warehouse.  Mr.  Stewart  also 
made  an  exhibit  of  his  disbursements  to  Leet  &  Stocking  for  general- 
order  charges  during  the  year  1871.  That  exhibit  is  as  follows : 

A.  T.  Stewart  &  Co. 

January  1,  1871,  to  December  31,  1871. 

Charges  for  first  month. 


Cunard . 2, 418  packages,  $3,  878  75 ;  average  per  package,  $1  60f 

Anchor .  39  packages,  48  50 ;  average  per  package,  1  24 

White  Star .  234  packages,  388  00 ;  average  per  package,  1  65f 


French,  (50)  North  River....  5  packages,  7  50;  average  per  package,  1  50 

Pier  3,  North  River .  16  packages,  28  00;  average  per  package  1  75 

2,712  4,350  75 


General  average  per  package,  $1.55. 


NEW  YORE  CUSTOM-HOUSE  INVESTIGATION. 


XXI 


Extra  storage  on  packages  in  store  after  first  month. 

CUNARD  LINE. 


Java,  1  package,  \  month’s  storage,  at  50  cents  per  month . $0  25 

Java,  2  packages,  1  month’s  storage,  at  50  cents  per  month .  1  00 

Siberia,  5  packages,  H  months’  storage,  at  50  cents  per  month .  3  75 

Aleppo,  1  package,  2-J  months’  storage,  at  50  cents  per  month .  1  25 

Siberia,  on  package,  3  months’  storage,  at  50  cents  per  month . 1  50 

Java,  1  package,  months’  storage,  at  50  cents  per  month .  2  25 

Calabria,  10  packages,  months’  storage,  at  50  cents  per  month .  22  50 

Scotia,  1  package,  5£  months’  storage,  at  50  cents  per  month .  2  75 

Java,  3  packages,  6  months’  storage,  at  50  cents  per  month .  9  00 

Java,  1  package,  7  months’  storage,  at  50  cents  per  month  . .  3  50 


WHITE  STAR  LINE. 

1  package,  1  month,  at  50  cents . . .  $0  50: 


ANCHOR  LINE. 


14  packages,  1  month,  at  50  cents 


P  00 


FRENCH  LINE. 

1  package,  1-}  months,  at  50  cents .  $0  75 

INMAN  LINE. 

Ex- City  of  Paris,  warehoused  from  public  store. 

1  package,  12-^  months,  at  50  cents .  $6  25 

2  packages,  2£  months,  at  50  cents .  2  50 

Average  on  all  about  $1. 44£. 


A.  T.  Stewart  &  Co. 

January  1,  1871,  to  December  31,  1871. 
Charges  for  first  month. 


Inman  line .  2,  361  packages,  $3, 025  25 ;  average  per  package,  $1  28 

Williams  &,  Gnion .  297  packages,  389  75;  average  per  package,  1  31£ 

National  line .  192*packages,  250  95;  average  per  package,  1  30£ 

French  line .  191  packages,  242  50;  average  per  package,  1  27 

Bremen  line .  623  packages,  914  50 ;  average  per  package,  1  47 

Hamburg  line . . .  497  packages,  753  50;  average  per  package,  152 


Total  number  packages.  .4, 161  5, 576  45 


General  average  per  package,  $1. 36. 

Extra  storage  on  packages  in  store  after  first  month. 

Inman  line,  1  package,  £  month . 

Inman  line,  2  packages,  1  month . 

Inman  line,  1  package,  2  months . 

Inman  line,  1  package,  5  months,  from  P.  S . 

Inman  line,  4  packages,  5  months . 

Williams  &  Guion,  2  packages,  $  month . 

Williams  &  Guion,  1  package,  2  months . 

National  line,  1  package,  1  month . . . 

National  line,  1  package,  5$  months . 

Bremen  line,  1  package,  month . 


$0  25 
1  00 
1  00 
3  09 
12  00 
50 
1  00 
50 
2  75 
25 


22  25 


Cartage  from  P.  S .  $1  00 

Cooperage . . .  4  50 


5  50 


XXII  NEW  YORK  CUSTOxM-HOUSE  INVESTIGATION. 

The  charges  in  the  foregoing  tables  include  the  cost  of  cartage,  labor, 
and  storage,  and  yet,  on  the  goods  received  from  the  Cunard  steamers, 
which  discharge  at  Jersey  City,  Mr.  Stewart  paid  Leet  &  Stocking  an 
/average  of  only  lOf  cents  per  package  more  than  he  represents  to  have 
been  their  charge  for  labor  and  storage  alone,  On  the  goods  received 
from  the  Hamburg  line  he  paid  but  two  cents  per  package  more  than 
he  states  as  their  charge  for  labor  and  storage.  On  the  goods  received 
from  the  Bremen  line  he  paid  actually  three  cents  less  per  package  than 
he  states  to  have  been  their  charge  for  labor  and  storage,  while  on  the 
goods  received  from  the  Inman  line  he  paid  22  cents  less,  and  from  the 
Anchor  line  more  than  25  cents  less  than  the  charges  which  he  attri- 
butes  to  Leet  &  Stocking  for  labor  and  storages 

Thus,  evidently,  the  only  difference  between  the  charges  of  Leet  & 
Stocking  and  those  at  the  Jersey  City  and  Hoboken  stores  is  that  they 
delivered  goods  on  the  Jersey  City  side  of  the  river  at  a  cost  of  $1  per 
package,  while  the.  former  delivered  them  on  the  New  York  side  at  the 
average  cost  of  a  little  more  than  $1.50  per  package.  Undoubtedly  this 
was  somewhat  to  the  disadvantage  of  Mr.  Stewart.  He  has  a  special 
contract  with  his  carman,  by  which  the  latter  trucks  for  an  even  40 
cents  per  package  from  whatever  point  the  goods  are  landed  at.  He, 
therefore,  can  get  his  goods  carted  from  the  Hoboken  stores  as  cheaply 
as  from  Leet  &  Stocking’s  stores.  By  having  his  goods  put  into  general 
order  at  Hoboken  and  Jersey  City  he  saves  the  cost  of  truckage  from 
those  points  to  Leet  &  Stocking’s  store.  But  the  burden  that  is  saved 
to  him  is  thrown  upon  his  carman.  It  is,  therefore,  not  surprising  to 
find  that,  while  Mr.  Stewart  champions  the  cause  of  the  steamship  com¬ 
pany,  his  carman  espouses  the  cause  of  Leet  &  Co.  Mr.  Cooper  was 
equally  mistaken  in  representing  the  charges  made  under  the  present 
system  to  be  double  what  they  were  under  the  former  system.  The 
bills  produced  by  Mr.  Stewart  clearly  show  his  mistake.  Mr.  Williams, 
the  agent  for  the  Williams  &  Guion  line,  says  the  charges  are  just  about 
the  same  as  formerly.  Mr.  Dale,  of  the  Inman  line,  testified  that  as  a 
rule  they  were  no  higher  than  they  had  been  for  a  good  many  years. 
He  produced  bills  which  he  had  paid  to  Leet  &  Stocking.  On  one  pack¬ 
age  he  had  paid  $1.87.  On  many  others  he  paid  $1.25  each.  In  one 
bill  of  341  packages  the  charge  was  but  a  dollar  each.  Mr.  Hurst,  of 
the  National  line,  said : 

I  do  not  find  that  Leet’s  charges  are  any  more  than  they  have  been  always  here  by 
other  warehouses,  in  Meyres  &  Bixby’s  time. 

Mr.  Henry  Shaw,  a  merchant  of  thirty  years’  standing,  testified  that 
he  paid  Leet  &  Stocking,  on  an  average,  about  a  dollar  per  package.  Mr. 
Squire,  a  gentleman  who  for  twenty-four  years  has  been  engaged  in  the 
warehouse  business,  testified  that  within  the  last  ten  years  the  charges 
have  been  $1.50  in  the  city  of  New  York.  The  rate  of  Leet  &  Stocking 
was  $1.25  for  the  same  package.  From  an  artidle  communicated  to  the 
New  York  Times  in  January  last  an  extract  is  taken,  because  Mr.  Squire, 
upon  oath,  avowed  himself  to  be  the  author  of  it  and  affirmed  the  truth 
of  it : 

During  the  last  ten  years  the  principal  part  of  the  general  order  has  been  held  by 
Mr.  Bixby — the  largest — Mr.  Squire,  Mr.  Meyres3  Mr.  Edwards,  Mr  Mason,  and  Leet  & 
Co.  Mr.  Bixby  charged  $1.50  for  ordinary  packages;  Mr.  Squire,  $1.20 ;  Mr.  Meyres, 
Edwards,  and  Mason,  $1.50 ;  Leet  &  Co.,  $1.25.  Mr.  Meyres  did  charge  Stewart  only  $1, 
but  that  was  the  exception.  He  made  it  up  on  the  rest.  So,  instead  of  Leet  &  Co. 
charging  double,  as  Messrs.  Lindsay  and  Stewart  say,  they  charged  much  less  than 
had  been  charged  for  the  last  ten  years. 

Mr.  Van  Saun,  the  superintendent  of  Leet  &  Stacking,  testified  as 
follows : 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XXIII 


We  are  charging  less  now  than  what  Mr.  Meyres  did.  I  can  give  you  a  memoran¬ 
dum  of  A.  T.  Stewart’s  packages,  which  run  about  the  same  as  they  always  did,  from 
Humphrey  &  Co’s  books,  from  1864  to  1872.  For  packages  that  A.  T.  Stewart  paid 
Humphrey  &  Co.  $1.50,  they  pay  Leet  &  Co.  $1.25.  For  a  package  that  they  paid 
Humphrey  &  Co.  $2.16,  they  paid  Leet  &  Co.  $1.50. 

It  would  seem  that  Mr.  Schwabe  must  have  been  mistaken  in  stating 
that  on  the  694  packages  sent  to  the  general-order  store  from  the 
steamer  of  July  16,  1871,  the  outlay,  if  put  into  his  store,  would  have 
been  but  fifty  dollars. 

It  is  certain  that  whatever  the  cost  to  him  might  have  been,  his 
charge  to  the  merchants  would  have  been  one  dollar  per  package.  And 
as  he  assured  the  committee,  on  oath,  that  their  object  in  securing  the 
general-order  business  was  not  to  profit  themselves,  but  to  accommodate 
the  merchants,  it  is  difficult  to  believe  he  would  have  charged  so  much 
for  what  cost  so  little. 

Mr.  Pohalski  was  equally  mistaken  in  saying  he  was  charged  $2.50 
per  case  on  his  cigars.  He  subsequently  sent  four  of  his  receipted  bills 
to  the  committee.  In  one  he  was  charged  $1.75  per  package.  In  two 
others  $1.50,  and  in  the  other  he  was  charged  for  three  cases,  and  three 
barrels  $7.50.  Mr.  Tillotson  was  correct  in  saying  he  had  been  charged 
30  cents  for  labor  and  storage  on  wire.  By  the  custom-house  it  was 
reduced  to  20  cents.  It  is  doubtless  true  that  Mr.  Tillotson  stored  the 
same  kind  of  wire  at  the  bonded  store  of  B.  B.  Livingston  &  Co.,  for 
5|  cents.  But  if  Mr.  Tillotson  meant  to  intimate  that  5J  cents  was  the 
current  rate  at  the  bonded  stores  foi;  such  goods,  he  was  clearly  mis¬ 
taken.  Mr.  Stocking  says  that  at  the  time  he  testified  Mr.  Tillotson 
had  200  bundles  of  wire  in  their  store  under  bond,  for  which  they  were 
paying  10  cents  for  labor  and  10  cents  for  storage.  Mr.  Charles  Squire 
swore  that  he  then  had  more  than  a  thousand  bundles  in  his  store 
bonded  at  8  cents  for  labor  and  8  cents  for  storage.  Mr.  Hutton  was 
also  wholly  without  warrant  for  saying  that  Leet  &  Co.’s  charges  are 
two  or  three  times  higher  than  had  been  the  rate  before  their  time. 
Indeed  the  evidence  shows  that  Leet  &  Stocking  have  but  little  to 
do  with  regulating  charges  on  goods  which  pass  through  their  stores 
under  general  order.  The  rates,  so  far  as  they  are  established  at  all, 
are  established  by  the  collector.  In  accordance  with  those  rates  each 
package  is  charged  as  it  comes  to  the  store.  The  business  of  rating 
the  packages  is  principally  conducted  either  by  Mr.  Yan  Saun  or  by 
Mr.  Phillips,  both  old  and  experienced  warehousemen.  Whenever  they 
exceed  the  rate  prescribed,  it  is  the  duty  of  the  deputy  collector,  on 
appeal,  to  correct  the  charge. 

Another  point  urged  against  the  economy  of  Leet  &  Stocking’s  stores 
by  Mr.  Stewart  was  their  exposed  situation.  He  presented  to  the  com¬ 
mittee  diagrams  illustrating  that  exposure.  By  some  means  he  had 
been  persuaded  to  believe  that  insurance  was  50  per  cent,  higher  there 
than  in  the  stores  at  Jersey  City  and  Hoboken.  Mr.  Nicholas  C.  Miller, 
the  secretary  to  the  rate  committee  of  the  board  of  underwriters,  tes¬ 
tified  on  the  contrary  that  the  rates  were  precisely  the  same.  On  one 
point  in  the  testimony  of  Mr.  Stewart  he  was  nearly  correct.  He  called 
the  general-order  business  a  monopoly.  It  is  so,  but  even  in  stating  that 
fact  Mr.  Stewart  fell  into  a  mistake,  for  he  represented  that  monopoly 
as  the  consequence  of  the  business  being  controlled  by  one  firm.  In 
fact,  it  is  not  controlled  by  one  firm.  One  firm  had  the  business  on  the 
North  River,  another  that  on  East  River,  and  another  that  in  Brooklyn. 
But  if  the  business  was  divided  among  forty  firms  it  would  be  none  the 
less  a  monopoly.  There  would  be  no  competition  for  any  part  of  it. 
The  goods  landed  on  one  dock  or  by  one  vessel  would  be  peremptorily 


XXIV 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


sent  to  one  store,  to  tlie  exclusion  of  all  others.  Those  from  another 
line  to  another  store.  The  charges  never  have  been  regulated  by  com¬ 
petition.  It  is  manifest*  they  never  can  be.  They  always  have  been, 
and  always  must  be,  controlled  by  authority. 

If  any  further  vindication  of  Leet  &  Co.’s  administration  is  needed  or 
is  possible,  it  is  found  in  an  event  which  has  transpired  since  this  ex¬ 
amination  commenced.  It  has  already  been  seen  that  the  charges  on 
all  goods  removed  from  the  general-order  store  within  forty-eight  hours 
from  the  time  the  vessel  arrived  are  refunded  to  the  merchant  by  the 
steamship  company.  Of  course  steamship  companies  feel  exorbitant 
charges  more  sensibly  than  the  merchants,  for  more  of  the  money  comes 
out  of  their  pockets.  Mr.  Stewart  admitted  that  he  recovered  more  than 
half  of  his  disbursements  lor  general-order  charges  from  the  steam¬ 
ship  companies.  His  account  with  the  Inman  line  for  1871  was  more 
favorable  to  him  even  than  that.  According  to  the  evidence  of  Mr.  Stewart 
himself,  the  Inman  Steamship  Company  sent  to  the  general-order  store 
during  the  year  1871,  2,361  packages,  on  which,  he  says,  he  paid  Leet  & 
Stocking,  $3,025.25.  No  other  line  except  the  Cunard  sent  a  third  of 
that  quantity  to  the  general-order  stores.  He  exhibited  to  the  com¬ 
mittee  a  table,  showing  just  what  was  paid  on  the  goods  from  each 
line.  Colonel  Leet  also  submitted  a  table  showing  precisely  the  same 
facts.  The  two  tables  exactly  agree.  There  can  hardly  be  a  mistake 
in  either.  And  yet  Mr.  Dale,  the  agent  of  the  Inman  line,  testified  that 
he  refunded  to  Mr.  Stewart  on  the  same  account,  $3,251,  and  he  ex¬ 
hibited  a  statement  of  the  amount  refunded  for  each  month  during  the 
year,  so  that  he  could  hardly  be  mistaken.  From  this  evidence  the  con¬ 
clusion  seems  to  be  irresistible  that,  instead  of  collecting  from  the  In¬ 
man  line  little  more  than  half  the  amount  he  paid  Leet  &  Co.  on  general- 
order,  Mr.  Stewart  actually  collected  over  $200  more  than  the  whole 
of  if.  It  is  manifest  that  if  the  merchants  feel  exorbitant  charges,  the 
steamship  companies  must  feel  them  much  more.  It  appears  from  the 
correspondence  found  on  page  686  of  the  third  wolume  of  the  testimony, 
that  in  March  last  the  present  collector,  in  order  to  satisfy  the  steam¬ 
ship  companies,  determined  to  allow  each  of  them  to  select  a  store  not 
under  their  own  control,  to  which  their  general-order  goods  should  be 
sent.  In  accordance  with  that  permission,  the  agents  of  the  Inman,  the 
National,  the  London  and  Great  Western,  and  the  General  Transat¬ 
lantic  Companies,  severally  made  choice  of  the  stores  occupied  by  Leet 
&  Stocking.  These  are  claimed  to  be  the  largest  lines  landing  on  the 
New  York  side  of  the  North  Fiver. 

If  still  further  evidence  be  needed  of  the  wantonness  of  the  charges 
urged  against  Leet  &  Stocking,  it  is  found  in  the  character  of  the  relief 
invariably  proposed. 

If  Leet  &  Stocking  abused  the  privilege  accorded  them,  the  remedy 
clearly  was  to  take  this  privilege  away.  That  has  not  been  proposed. 
As  before  intimated,  the  effort  has  been,  not  to  deprive  Leet  &  Stocking 
of  the  general-order  business,  but  only  to  restore  a  part  of  it  to  the 
Cunard  Company,  and  another  part  to  the  North  German  Lloyds,  leav¬ 
ing  the  balance  with  Leet  &  Stocking.  Thus,  in  the  letter  already  re¬ 
ferred  to,  addressed  by  the  Secretary  of  the  Treasury  to  Collector 
Grinnell,  he  did  not  intimate  the  necessity  or  propriety  of  excluding 
Leet  &  Stocking  from  the  general-order  business,  but  only  of  restoring  to 
the  steamship  companies  that  which  they  had  formerly  enjoyed.  So, 
when  certain  New  York  merchants  addressed  Collector  Murphy  on  the 
same  subject  in  October,  1870,  they  did  not  ask  him  to  exclude  Leet  & 
Stocking  from  the  business,  but  to  continue  to  the  Cunard,  Bremen,  and 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XXV 


Hamburg  lines  that  portion  of  it  which  they  had  formerly  possessed. 
When  Mr.  Stewart  appealed  to  the  President,  it  was  not  to  obtain  for 
the  bleeding  merchants  of  Hew  York  relief  against  the  exactions  of 
Leet  &  Stocking,  but  to  obtain  for  those  steamship  companies  a  share 
in  them.  In  the  written  statement  with  which  Mr.  Stewart  prefaced 
his  testimony  before  this  committee,  he  commenced  with  a  complaint, 
not  of  Leet  &  Stocking’s  exactions,  but  of  the  removal  of  the  general- 
order  business  from  the  Cunard  and  Hoboken  stores.  In  the  extract 
from  a  Senate  debate,  quoted  in  the  resolution  which  directed  this  ex¬ 
amination,  the  administration  of  Leet  &  Co.  is  styled  u  a  scandalous 
system  of  robbery.”  Yet  the  Senator  who  is  understood  to  have  uttered 
that  language  was  a  member  of  the  Joint  Committee  on  Retrenchment 
which  examined  this  whole  subject  in  February,  1871.  But  that  com¬ 
mittee  did  not  propose  to  break  up  this  system  of  “  robbery.”  It  pro¬ 
posed  simply  to  divide  it  with  the  Cunard  Company  and  the  Horth 
German  Lloyds,  who  had  formerly  shared  in  the  system,  and  whose 
charges  for  the  same  services  were  precisely  the  same  as  those  of  Leet 
&  Stocking. 

In  the  judgment  of  the  committee,  the  Government  ought  not  to 
permit  the  steamship  companies  to  have  control  of  general-order  stores. 
For  this  conclusion,  several  reasons  might  be  urged.  These  only  are 
mentioned :  The  steamship  companies  have  now,  by  perhaps  too  partial 
legislation,  secured  the  sole  prerogative  of  determining  what  shall  be 
general-order  goods  and  what  shall  not.  If  they  choose,  they  may,  as 
soon  as  they  reach  the  dock,  unload  the  whole  cargo,  and  send  the  whole 
to  the  general-order  store.  The  only  penalty  for  so  doing  is  that  they 
pay  the  charges  on  such  as  are  entered  within  forty-eight  hours.  If  the 
company  owned  the  stores,  the  only  penalty  would  be  that  they  charge 
nothing  for  goods  entered  within  forty-eight  hours.  That  is  no  penalty. 
It  is  evident  they  can  store  in  their  warehouses  as  cheaply  as  on  ship¬ 
board.  They  must  store  them  somewhere.  If  they  own  the  stores,  the 
inducement  is  great  to  liurry*goods  into  the  store.  This  effect  is  illus¬ 
trated  by  the  following  exhibits  taken  from  the  records  of  the  custom¬ 
house  :  During  the  month  of  February,  1869,  when  the  Cunard  Company 
had  a  general-order  store,  they  sent  7,547  packages  into  it,  and  only 
2,753  packages  were  sent  under  bond  to  other  stores.  In  February, 
1871,  when  the  Cunard  Company  had  no  general-order  store,  they 
discharged  only  4,729  packages  under  general  order,  and  sent  3,268 
packages  to  bonded  warehouses.  During  the  month  of  February,  1869, 
when  the  Hoboken  lines  had  a  general-order  store,  6,402  packages  were 
put  into  it,  while  4,594  packages  only  were  sent  under  bond  to  other 
stores.  In  February,  1872,  the  same  lines,  then  having  no  general-order 
store,  unloaded  only  2,000  packages  under  general  order,  while  more 
than  15,000  packages  were  sent  under  bond. 

Under  the  present  warehouse  system  the  Government  demands  and 
should  have  double  security  for  payment  of  its  duties.  First,  the  pos¬ 
session  of  the  goods,  to  be  resorted  to  if  not  lost  or  destroyed.  Second, 
a  bond  of  the  importer,  to  be  resorted  to  if  the  goods  are  lost  or  de¬ 
stroyed.  In  the  case  of  goods  sent  to  the  general-order  store  a  bond  is 
not  obtained.  Goods  go  to  that  store  only  because  the  owner  does  not 
appear  to  bond  them.  Once  there,  he  can  let  them  remain  there;  and, 
to  the  extent  of  the  duties,  the  Government  insures  against  all  possible 
losses.  During  a  single  month,  when  the  Cunard  and  German  lines  sent 
general-order  goods  to  their  own  stores,  the  Government  had  no  bond 
for  the  duties  on  13,949  packages;  it  had  bond  on  only  7,347  packages. 
During  a  single  month,  when  those  lines  had  no  general-order  stores,  the 


XXVI 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Government  was  deprived  of  the  bond  only  on  6,729,  and  held  bond  on 
18,318  packages.  A  committee  representing  the  Chamber  of  Commerce 
of  New  York  has  advised  that  each  of  the  steamship  companies  should 
be  allowed  to  maintain  a  warehouse,  into  which  should  be  sent  the  un¬ 
claimed  portions  of  its  own  cargoes. 

It  is  very  clear  if  one  is  allowed  that  privilege  all  should  be.  But  it 
seems  equally  clear  that  if  every  company  were  accorded  that  privilege, 
another  consequence  would  flow  from  it  which,  if  not  prejudicial  to 
the  Government,  would  be  objectionable  to  the  warehousemen  of  New 
York.  The  companies  having  already  secured  the  right  to  unload  the 
whole  cargo  under  general  order,  if  they  owned  the  stores,  they  could 
place  the  entire  of  every  cargo  in  them.  To  be  sure,  the  merchant 
might,  if  he  pleased,  enter  the  goods  within  forty-eight  hours,  and 
remove  them  to  a  bonded  warehouse  without  charge  for  storage  on  the 
part  of  the  company.  But  they  could  be  removed  only  under  the  double 
penalty  of  paying  cartage  to  another  bonded  warehouse,  and  of  giving 
bond  for  them  there,  whereas,  by  allowing  them  to  remain  in  the  com¬ 
panies’  stores,  the  merchant  would  avoid  the  bond  and  avoid  the  cartage 
also.  Under  such  circumstances  it  is  scarcely  to  be  doubted  the  mer¬ 
chant  would  simply  adjust  the  price  of  storage,  and  let  the  goods  remain 
in  the  companies’  stores.  Thus,  by  the  simple  process  of  adding  the 
privilege  of  storing  unclaimed  goods  to  the  prerogative  now  enjoyed  of 
decreeing  what  shall  be  unclaimed  goods,  the  steamship  companies 
would  be  secured  in  a  complete  monopoly  of  the  storage  at  that  port, 
and  the  merchants  would  avoid  all  personal  liability  for  the  duties. 

The  committee  is  also  instructed  to  inquire  whether  any  charges  for 
storage  or  carting  have  been  made  or  are  made  by  officers  of  the  custom¬ 
house,  or  persons  acting  under  the  regulations  of  the  custom-house, 
which  charges  are  not  authorized  by  law. 

It  has  been  seen  already  that  the  law  does  not  limit  the  fees  for  stor¬ 
age  or  for  cartage.  It  can  hardly  be  said,  therefore,  that  any  charge 
which  has  been  or  could  be  made  for  such  service  would  not  be 
authorized  by  law.  It  has  also  been  seen  that  the  charges  for  storage 
of  bonded  goods  are  regulated  by ‘contract.  The  owner  of  the  goods 
makes  his  own  choice  among  the  bonded  warehouses,  and  stores  in  that 
which  will  store  the  cheapest.  Under  the  administration  of  Collector 
Grinnell,  the  business  of  carting  imported  merchandise  was  organized 
into  what  was  called  a  bureau,  at  the  head  of  which  was  placed  an  agent, 
who  was  paid  by  a  commission  on  the  earnings  of  the  carman.  It  is 
claimed  by  the  authors  of  that  system  that  the  cost  of  cartage  was  ac¬ 
tually  reduced  by  it  below  what  it  had  formerly  been.  The  evidence 
seems  to  sanction  that  view.  The  plan,  however,  after  a  trial  of  a  few 
months,  failed  to  secure  the  approval  of  the  Secretary  of  the  Treasury. 
He  accordingly  advised  that  the  bureau  be  abolished,  and  that  the 
charges  for  cartage  be  still  further  reduced  by  the  amount  of  the  com¬ 
mission  paid  to  the  agent.  That  change  was  accordingly  made  before 
Mr.  Grinnell  went  out  of  office. 

Mr.  Daniel  H.  Tompkins,  a  deputy  collector  of  customs,  and  in  charge 
of  the  public  stores,  testified  before  the  committee  that  the  charges  for 
cartage  in  the  port  of  New  York  during  the  year  1868  averaged  45.64 
cents  on  each  package ;  that  during  the  year  1869  the  average  charge 
was  46.08  cents ;  during  the  year  1870  the  average  charge  was  36.96 
cents,  and  during  the  year  1871  the  average  charge  was  34.64  cents  per 
package. 

It  has  already  been  shown  in  the  report  that  the  charge  for  storing 
and  handling  unclaimed  goods  has  not  been  higher  for  the  last  two  years 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XXVII 


tli an  they  formerly  were.  It  remains  to  be  said  that  those  charges  have 
been  higher  for  the  last  two  years  than  they  ought  to  have  been. 

The  estimates  made  by  several  uninformed  witnesses  of  Leet  &  Co.’s 
profits  are  evidently  extravagant.  One  witness  estimated  them  as  high 
as  $200,000  per  annum.  Colonel  Leet  gave  the  exact  figures,  taken 
from  the  books  of  the  firm.  Accordiug  to  those  figures  the  gross  receipts 
of  the  company,  for  a  little  more  than  twenty  months,  were  $203,936.58. 
Out  of  that  sum  they  paid  $51,395.99  for  cartage,  and  for  labor,  rents, 
lights,  fuel,  and  incidental  expenses,  $94,311.35.  According  to  that  ex¬ 
hibit  their  net  profits  from  June  18,  1870,  to  December  31,  1871,  were  a 
little  more  than  $58,000. 

Of  this  sum  Colonel  Leet  estimated  that  $12,000  were  derived  from 
the  storage  of  bonded  goods ;  that  would  leave  but  $46,000  as  the  profits 
of  the  general-order  business,  equal  to  about  $27,000  per  annum,  or 
about  13  per  cent,  on  the  amount  of  business  done. 

Still  this  is  more  than  a  fair  profit,  and  the  committee  is  glad  to  learn 
that  the  present  collector,  who  entered  upon  his  office  but  a  few  weeks 
before  this  examination  commenced,  has  already  signalized  his  admin¬ 
istration  by  a  revision  of  these  charges,  and  by  a  reduction  of  them, 
which  is  understood  to  meet  with  the  approval  of  the  Chamber  of  Com¬ 
merce  of  New  York. 

The  committee  is  also  instructed  to  inquire  whether  presents  have 
been  accepted  by  officers  of  the  custom-house  from  other  officers  subor¬ 
dinate  to  them,  or  acting  under  their  control,  and  whether  officers  mak¬ 
ing  such  presents  have  been  selected  with  preference  to  attend  the 
discharge  of  steamships. 

There  is  no  evidence  of  presents  having  been  tendered  to  or  accepted 
by  officers  of  the  custom-house  from  their  subordinates,  and  no  evi¬ 
dence  of  preference  given  to  one  of  such  subordinates  over  others  in 
the  discharge  of  steamships. 

A  good  deal  of  testimony  was  submitted  to  the  committee  on  the 
subject  of  bribes  and  presents  to  officers  connected  with  the  customs. 
That  testimony  only  made  clear  one  fact,  that  there  was  no  necessity  nor 
any  apology  for  ever  making  such  presents. 

The  business  of  the  merchants  with  the  custom-house  can  be  at  all 
times  as  well  transacted  without  any  such  bribes  or  presents.  Honor¬ 
able  merchants,  many  of  them,  declared  with  much  emphasis  that  they 
paid  no  such  bribes,  and  made  no  such  presents.  Such  was  the  testi¬ 
mony  of  the  chief  clerk  of  Mr.  A.  T.  Stewart,  of  Mr.  H.  13.  Claflin,  of 
Mr.  J.  S.  Beecher,  of  Mr.  William  Bedmond,  of  Mr.  B.  H.  Hutton,  and 
others.  Other  witnesses,  however,  testified,  in  some  cases,  to  the 
knowlege,  in  other  cases  to  the  belief,  that  such  presents  were 
given.  There  seems  but  little  doubt  that  the  usage  has  obtained, 
and  is  very  general  among  the  agents  of  steamboats  and  of  vessels 
discharging  in  the  port  of  New  York,  to  make  presents  to  the 
inspectors  aiding  in  such  discharge.  Those  presents  are  said  to 
vary  from  $10  to  $25  in  amount  to  an  inspector,  for  the  discharge 
of  a  single  vessel.  It  is  in  evidence  by  the  agents,  wTho  confess 
to  making  such  payments,  that  the  present  Secretary  of  the  Treasury 
made  an  effort  to  abolish  that  practice.  He  sent  an  agent  to  New 
York  to  investigate  the  practice.  He  issued  a  circular  prohibiting  all 
such  payments,  but  in  spite  of  the  known  wishes  of  the  Secretary,  and 
of  his  known  commands,  the  practice  evidently  has  continued.  The 
testimony  shows  pretty  clearly  that  the  practice  would  not  be  con¬ 
demned  bv  good  morals,  if  it  were  not  condemned  by  law ;  that  the 
money  is  paid,  not  to  secure  a  violation  of  law,  but  as  a  compensation 


XXVIII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


for  services  rendered  in  addition  to  services  required  by  law.  The 
usage  is  not  of  recent  date,  but  has  come  down  from  a  former  genera¬ 
tion. 

The  agents  urged  two  reasons  for  the  payment  of  these  gratuities  to 
the  inspectors.  The  main  reason  is  said  to  be  that  sometimes  a  vessel 
will  arrive  at  her  dock  near  sundown,  having  been  delayed  at  quaran¬ 
tine  or  by  other  circumstances.  In  the  mean  time  the  permits  have  been 
accumulating  on  the  table  of  the  inspectors  at  the  pier.  The  permits 
must  be  entered  upon  a  book  alphabetically  before  the  vessel  can  com¬ 
mence  unloading.  The  labor  of  the  inspector  for  the  day  is  ended  at 
sunset.  By  devoting  the  night,  or  a  part  of  it,  to  the  entry  of  those 
permits  on  his  catalogue,  the  vessel  can  be  ready  to  commence  discharg¬ 
ing  early  on  the  following  morning.  For  that  extra  labor  performed  by 
the  inspector  after  the  close  of  the  day  the  boats  are  in  the  habit  of 
making  to  the  inspectors  a  gratuity,  which  they  term  house-money,  be¬ 
cause  the  work  for  which  it  is  paid  is  performed,  not  at  the  dock,  but  at 
the  home  of  the  inspector. 

The  other  reason  urged  for  these  payments  is  that  by  them  the  in¬ 
spector  is  induced  to  allow  some  extra  indulgence  to  the  vessel  in  dis¬ 
charging.  The  regulations  are  said  to  require  that  the  inspector  shall 
allow  no  more  goods  to  be  thrown  out  from  the  vessel  upon  the  pier  than 
can  be  removed  from  the  pier  during  the  day.  If  the  inspector  insists 
that  the  day  shall  end  at  sunset  the  work  of  discharging  the  vessel  is 
prolonged.  If  he  is  pleased  to  continue  the  labor  of  removing  for  a  few 
hours  after  sunset,  the  work  of  unloading  is  hastened.  The  agents  sug¬ 
gest  that  this  extra  work  shall  be  not  only  authorized,  but  required,  on 
the  part  of  the  customs  officers,  and  shall  be  compensated  according  to 
a  fixed  rate,  to  be  prescribed  by  the  Secretary  of  the  Treasury  or  by  the 
collector,  instead  of  being  left  to  the  pleasure  of  the  agents  and  of  the 
inspectors. 

The  committee  is  of  the  opinion  that  either  that  suggestion  should 
be  adopted  and  acted  upon  at  once,  or  that  such  extra  services  should 
be  peremptorily  prohibited. 

Some  testimony  was  given  which  tended  to  show  that  in  one  or  two 
instances  payments  had  been  made  to  inspectors  which  bore  a  closer 
resemblance  to  bribery  than  the  practice  just  spoken  of,  but,  upon  fuller 
inquiry,  it  was  ascertained  that  those  payments  had  not  I>een  made  to 
inspectors  or  other  officers  of  the  customs,  but  to  agents  employed  on 
the  docks. 

With  reference  to  connivance  on  the  part  of  officers  of  the  custom¬ 
house  at  frauds  or  irregular  practices  in  passing  the  baggage  of  travel¬ 
ers,  the  testimony  left  but  little  reason  to  doubt  that  officers  formerly 
in  the  service  of  the  custom-house  had  permitted  baggage  to  pass  with¬ 
out  payment  of  duty,  and  had  received'  a  consideration  for  doing  so. 
Mr.  Charlton  T.  Lewis  testified  explicitly  that  he  himself,  in  the  year 
1867,  and  again  in  the  year  1860,  paid  money  to  inspectors  for  passing 
baggage. 

Mr.  Lewis  was  of  the  opinion  that  in  the  baggage  so  passed  there 
were  no  dutiable  goods,  but  there  seems  little  room  for  doubt  that  an 
inspector  who  would  take  money  for  passing  baggage  not  dutiable 
would  also  pass  baggage  that  was  dutiable  for  an  equivalent. 

The  testimony  gives  also  some  grounds  for  believing  that  officers  still 
in  the  customs  service  are  guilty  of  irregular  practices  in  passing  the 
baggage  of  passengers. 

A  Mr.  Snyder  testified,  upon  the  information  of  a  friend,  that  $5 
were,  in  one  instance,  paid  by  his  friend  to  an  inspector  for  passing  some 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XXIX 


trunks.  Mr.  Love,  the  gentleman  referred  to,  was  employed  by  a  mer¬ 
cantile  liouse  as  a  traveling  salesman,  and  was,  at  the  time  the  commit¬ 
tee  were  taking  testimony  in  New  York,  out  of  the  city,  on  a  trip  to  the 
West,  and  Mr.  Synder  did  not  know  where  he  was  to  be  found.  Mr. 
Snyder  did  not  know  who  the  inspector  was  who  received  the  $5,  nor 
was  any  evidence  obtained  tending  to  the  conviction  of  any  particular 
officer  now  in  the  customs  service  of  any  such  fraud  or  irregular  prac¬ 
tice. 

The  special  agent,  Mr.  B.  G.  Jayne,  testified  that  he  had  from  time  to 
time  detected  some  inspectors  in  receiving  bribes  or  gratuities ;  that 
some  were  detected  under  the  administration  of  Mr.  Grinnell  and  some 
under  the  administration  of  Mr.  Murphy;  that  those  detected  were 
removed  at  once. 

Testimony  was  submitted  tending  very  strongly  to  convict  an  inspector 
then  in  the  custom-house,  by  the  name  of  Cloyes,  of  an  attempt  to  obtain 
some  coal  while  being  discharged  from  the  vessel.  The  inspector  denied 
his  guilt,  but  the  committee  was  far  from  being  satisfied  of  his  inno¬ 
cence,  and  referred  the  evidence  to  the  collector  for  a  fuller  investigation. 
The  result  has  not  been  reported. 

The  committee  is  also  instructed  to  inquire  whether  articles  of  mer¬ 
chandise,  while  under  the  control  of  officers  of  the  custom-house,  have 
been  abstracted,  and  whether  or  not  such  articles  have,  on  application 
of  the  owners  in  several  cases,  been  returned,  and  whether  any  officers 
of  the  customs  have  been  punished  for  abstracting  articles  of  merchan¬ 
dise  under  their  control. 

The  committee  regret  to  find  in  the  testimony  too  much  assurance 
that  articles  of  merchandise  are  occasionally  abstracted  while  under  the 
control  of  officers  of  the  customs.  There  is  no  evidence  before  the  com¬ 
mittee  that  any  such  abstracted  goods  are  ever  returned,  nor  is  there  any 
evidence  that  there  has  been  any  failure  to  dismiss  officers  when  de¬ 
tected  in  such  practices.  Such  abstractions  are  not  so  heavy  as  to  be 
very  damaging,  but  are  so  frequent  as  to  be  very  annoying.  They  are 
the  more  scandalous  because  they  indicate  shiftlessness  more  than  guilt. 
Men  seem  to  be  betrayed  into  such  abstractions  not  so  much  by  a  sense 
of  cupidity  as  by  a  sense  of  impunity.  Two  of  the  complaints  preferred 
to  the  committee  will  sufficiently  indicate  the  character  of  these  abstrac¬ 
tions  :  Messrs.  H.  B.  Clafiin  &  Co.  complained  that,  from  an  invoice  of 
silk  scarfs  received  in  January  last,  one  case  was  opened  and  a  dozen 
scarfs  were  taken  out.  Messrs.  Binge  &  Currie  lost  some  goods.  Upon 
applying  to  their  attorneys  to  obtain  redress  for  them  they  were  advised 
it  would  cost  four  times  the  amount  of  their  claims  to  prove  them  in  a 
court  of  law.  That  such  losses  may  occur  and  the  merchant  not  have 
an  adequate  remedy  must  certainly  be  annoying  to  him,  as  it  surely  must 
be  mortifying  to  the  Government.  And  yet,  the  obstacles  in  the  way  of 
providing  such  a  remedy  are  serious.  Goods  are  purchased  in  a  foreign 
market,  and  when  opened  in  the  merchant’s  store  in  New  York  are 
found  deficient.  The  difficulty  is  in  determining  where  the  loss  occurred. 
The  whole  of  the  invoice  may  never  have  been  packed.  Every  whole¬ 
sale  merchant  in  New  York,  who  reflects  how  frequent  are  the  reclama¬ 
tions  made  on  himself  for  goods  missed  from  packages  which  he  has 
sold,  will  realize  how  great  this  liability  is. 

The  missiug  parcels  may  have  been  abstracted  before  the  case  reached 
the  point  of  export.  They  may  have  been  taken  on  shipboard.  They 
may  have  been  taken  on  the  docks.  They  may  have  been  abstracted  by  the 
carman  wrho  rides  them  to  the  general-order  store.  They  may  have  been 
taken  out  while  in  the  store,  or  while  passing  from  it  to  the  public  store. 


XXX 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


After  their  arrival  at  the  public  store  they  may  have  been  abstracted 
by  the  laborers  who  are  employed  by  the  contractor  to  deliver  them  to 
the  examiner.  They  may  have  been  taken  by  those  who  are  employed 
to  open  and  repack  the  case.  They  may  have  been  taken  by  the  exam¬ 
iner  or  verifier.  They  may  have  been  taken  by  the  same  laborers  who, 
after  appraisal,  receive  them  from  the  examiner  and  deliver  them  to  the 
merchant’s  carman.  They  may  have  been  taken  by  the  latter  while 
transporting  them  from  the  public  store.  From  the  point  where  the  case 
is  first  packed,  until  it  reaches  the  merchant’s  store,  there  is  but  one 
place  where  the  contents  of  the  case  can  be  verified.  That  is  in  the  ex¬ 
aminer’s  room  in  the  public  store.  That  same  case,  which  travels  only 
at  such  peril  from  a  pier  on  the  North  Eiver  to  a  store  on  Broadway,  a 
forwarding  merchant  will  contract  to  deliver  in  Omaha,  and  if  upon  its 
arrival  in  Omaha  a  paper  of  needles  is  missing  the  forwarding  man  in 
New  York  will  pay  for  it  and  will  himself  assume  the  task  of  ascertain¬ 
ing  where  the  delinquency  occurred.  To  furnish  the  merchant  the  same 
protection  against  loss  while  the  Government  handles  his  goods  is,  per¬ 
haps,  impracticable.  There  are  those  who  argue  that  the  Government 
should  be  held  to  the  same  responsibility  for  the  safety  of  goods  in  the 
custody  of  the  truckmen,  store-keepers,  openers  and  packers,  and 
examiners,  that  the  law  imposes  upon  the  bailee  for  hire.  The  commit¬ 
tee  cannot  agree  to  this  doctrine,  and  for  the  single  reason  that  the  Gov¬ 
ernment  is  not  a  bailee  for  hire. 

The  whole  warehouse  system  is  provided,  not  for  the  profit  of  the 
Government,  but  for  the  profit  of  the  importer.  The  Government  gets 
no  pay  for  its  quasi  custody  of  the  goods.  It  only  takes  that  qualified 
possession  in  order  to  secure  payment  of  its  duties.  Its  liability  at 
most  would  be  that  of  a  holder  of  a  pledge.  But  the  Government  has 
hitherto  refused,  and,  doubtless,  will  continue  to  refuse,  to  take  such 
pledge  upon  any  other  terms  than  those  now  provided  by  law,  to  wit, 
that  the  Government  shall  be  exempt  from  liability  for  the  misconduct 
of  its  agents.  A  very  intelligent  merchant  of  New  York  proposed,  in  a 
letter  to  the  committee,  that  the  collector  of  the  port  should  be  held 
responsible  to  the  merchant,  on  reasonable  evidence,  for  all  goods  stolen 
while  in  his  possession,  and  that  he  be  authorized  to  deduct  from  the 
pay  of  those  through  whose  hands  the  goods  may  pass  pro  rata  the 
amount  of  these  losses.  Such  a  requirement  seems  clearly  unjust. 
The  goods  are  never  actually  in  the  possession  of  the  collector.  To 
hold  him  responsible  for  their  loss  is  to  say  that  the  man  who  never 
sees  the  goods  shall  be  deemed  to  be  the  one  who  steals  all  that  are 
missing.  As  a  compensation  for  this  risk,  to  be  sure  it  is  proposed  to 
authorize  the  collector  to  make  reprisals  on  his  subordinates  to  the 
amount  of  his  disbursements.  But  the  pay  of  his  subordinates  may 
not  be  equal  to  the  disbursements  of  the  collector,  and  if  it  was,  the 
collector  would  be  compelled  to  fine  those  who  were  certainly  innocent 
equally  with  those  who  were  possibly  guilty. 

Imports  passing  from  the  ship  to  the  merchant  through  the  public 
store  are  handled  by  one  or  more  truckmen,  one  or  more  store-keepers, 
by  the  labor  contractor,  by  the  opener  and  packer,  and  by  the  exam¬ 
iner. 

If  any  are  stolen  on  that  short  voyage  they  are  almost  certainly 
stolen  by  some  one,  and  not  by  any  two  or  more  of  these  agents.  The 
truckman  has  no  check  upon  the  store  keeper  or  upon  the  labor  con¬ 
tractor  or  the  examiner.  Neither  of  these  latter  agents  have  any 
adequate  check  upon  the  conduct  of  the  carman  or  upon  that  of  each 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XXXI 


other.  Besides,  neither  the  examiner,  the  trackman,  the  labor  contractor, 
or  the  opener  and  packer,  is  a  subordinate  of  the  collector. 

The  committee  appointed  by  the  New  York  Chamber  of  Commerce  to 
confer  with  this  committee  made  a  suggestion  upon  this  subject  which 
seems  to  promise  some  improvement.  That  suggestion  is,  that  the  juris¬ 
diction  of  the  labor  contractor  be  so  enlarged  as  to  include  the  duties 
now  discharged  by  the  opener  and  packer.  Under  the  present  system, 
when  a  package  of  merchandise  reaches  the  public  store  it  is  received 
there  by  the  labor  contractor.  By  his  servants  it  is  raised  to  the  floor 
on  which  it  is  to  be  examined.  By  them  it  is  kept  until  called  for  by 
the  examiner.  Of  course  it  maybe  pilfered  during  that  interval.  If  it 
is  not,  when  it  is  called  for  by  the  examiner  it  is  delivered  to  the  opener 
and  packer,  by  whom  the  package  is  opened.  The  contents  are  then 
verified  and  appraised;  but  the  contractor  does  not  know  what  the 
verifier  finds  in  the  package.  The  verifier  does  not  know  what  was  in 
it  when  opened.  If  the  contents  are  then  found  correct  it  is  the  duty 
of  the  packer  to  repack  the  case  and  redeliver  it  to  the  contractor ;  but 
neither  the  verifier  nor  the  contractor  knows  what  the  packer  replaced 
in  the  case. 

If  the  verifier  reports  the  case  full  and  it  is  found  by  the  merchant 
to  be  short,  he  does  not  know  whether  the  missing  parcels  were  ab¬ 
stracted  by  the  packer  or  by  the  contractor,  or  by  his  own  carman 
who  carts  it  to  his  store. 

If,  on  the  contrary,  the  verifier  reports  the  case  short,  no  one  knows 
whether  the  goods  were  abstracted  by  the  opener,  or  by  the  contractor 
from  whom  he  received  it,  or  by  the  carman  who  rode  the  package  from 
the  pier. 

If,  however,  the  suggestion  of  the  chamber  of  commerce  be  adopted, 
the  contractor  will  then,  as  now,  receive  the  goods  at  the  door  of  the 
public  store.  He  will  then  open,  and,  after  appraisal,  repack  them.  He 
will  deliver  them  to  the  merchant’s  carman.  If  the  merchant  finds  his 
case  short,  he  will  know  that  the  articles  were  abstracted  either  by  his 
own  carman,  by  the  contractor,  or  before  the  goods  reached  the  public 
store.  The  field  of  his  inquiries  will  be  materially  narrowed  by  that 
single  change.  It  will  be  very  easy  to  so  provide  as  that  the  carman 
cannot  open  the  case  while  in  transit  from  the  public  store  to  the  mer¬ 
chant  without  certain  detection.  Practically,  the  only  doubt  the  mer¬ 
chant  will  have  to  resolve  will  be  whether  the  case  was  rifled  by  the 
contractor  or  before  it  reached  the  public  store.  If,  in  addition  to  open¬ 
ing  and  repacking,  the  contractor  be  employed  to  do  the  carting  from 
the  dock  to  the  public  store,  practically  only  one  man  would  intervene 
between  the  vessel  and  the  merchant.  That  man  could  properly  be 
held  responsible  for  delivering  to  the  merchant  goods  just  as  he  re 
ceived  them  from  the  dock,  because  he  would  be  paid  for  that  responsi¬ 
bility  and  would  contract  with  direct  reference  to  it.  For  his  own  pro¬ 
tection  he  would  naturally  employ  an  experienced  man  to  receive  his 
goods  from  the  ship.  If  that  agent  took  exception  to  the  condition  of 
a  package  when  delivered  to  him,  he  would  make  his  exception  at  the 
pier  in  the  presence  of  the  steamer’s  agent,  and  if  the  latter  did  not 
acquiesce  in  the  justice  of  the  exception,  he  might,  if  he  chose,  call 
upon  the  inspectors  present  to  verify  the  condition  of  the  case,  or  he 
might  follow  it  to  the  public  store  and  have  the  contents  verified  at 
once. 

The  committee  also  suggest  that  unclaimed  goods  should  be  received 
at  the  pier  by  the  general-order  man,  and  by  him  carted  to  the  ware¬ 
house,  and,  when  ordered  to  the  public  stores,  should  be  delivered  to  the 


XXXII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


contractor.  In  that  case  the  general-order  man  would  settle  the  con¬ 
dition  of  the  case  with  the  vessel  at  the  dock,  and  with  the  contractor 
at  the  warehouse.  He  might  properly  be  held  to  the  obligation  of 
delivering  the  package  to  the  contractor  in  the  same  condition  he 
received  it  from  the  vessel.  In  such  case,  but  two  parties  would  inter¬ 
vene  between  the  vessel  and  the  merchant.  But  if  it  should  not  be 
thought  advisable  to  enlarge  the  jurisdiction  of  the  labor  contractor, 
the  committee  suggest  whether  it  would  not  be  expedient  to  discontinue 
the  services  of  that  contractor  altogether,  and  thus  enlarge  the  jurisdic¬ 
tion  of  the  appraiser,  and  so  charge  him  with  the  whole  responsibility 
for  tlfe  security  of  the  package  from  the  time  it  leaves  the  vessel  until 
it  is  delivered  to  the  merchant’s  carman. 

The  committee  is  also  instructed  to  inquire  and  report  to  what  ex¬ 
tent  the  practice  of  compromising  with  merchants  defrauding  or  at¬ 
tempting  to  defraud  the  revenue  prevails,  and  whether  and  to  what 
extent,  by  such  compromises,  the  amount  of  revenue  due  to  the  United 
States  in  such  cases  has  been  diminished,  and  whether  any  and  what 
pecuniary  benefit  has  been  derived  therefrom  by  the  officers  making 
such  compromises. 

A  statement  furnished  from  the  records  of  the  district  court  for  the 
southern  district  of  New  York  shows  that  between  the  4th  of  March, 
1869,  and  the  30th  of  December,  1871,  forty-three  suits  commenced  to 
recover  the  value  of  goods  alleged  to  have  been  fraudulently  entered 
have  been  terminated  by  compromise. 

The  record  does  not  show  what  the  duty  on  such  goods  was.  The 
appraised  value  of  the  goods  aggregated  $1,788,719.85.  The  amount 
received  on  settlement,  exclusive  of  expenses,  is  $724,681.35. 

In  twenty-two  of  those  suits  the  full  amount  sued  for,  less  expenses, 
was  paid  into  court. 

In  the  same  time  eightv-five  suits  in  rem  have  been  determined. 
Eighteen  of  those  were  ended  by  compromise  and  the  remainder  by 
judgment  and  sale.  The  appraised  value  of  the  goods  involved  in  the 
eighteen  suits  was  $75,062.05. 

The  amount  received  on  settlement,  exclusive  of  expenses,  was 
$47,757.36.  In  addition  to  the  foregoing  recoveries,  there  has  been  col¬ 
lected  for  penalties  $45,499.34. 

It  would  seem  that  the  revenues  must  have  profited  rather  than  lost 
by  these  proceedings. 

It  does  not  appear  that  the  officers  of  the  customs  derived  any  pecu¬ 
niary  benefit  from  those  compromises  except  in  the  way  of  such  moieties 
as  the  law  awards  to  them. 

Witnesses  were  not  agreed  as  to  the  political  action  of  the  custom¬ 
house.  They  disagreed,  not  only  as  to  what  that  action  was,  but  as  to 
what  it  should  be.  Mr.  Greeley  represents  that  the  officers  of  the  cus¬ 
toms  are  very  active  and  very  potential  in  the  politics  of  the  city  and 
of  the  State.  He  represents  that  it  is  his  habit  to  travel  much  over  the 
State;  that  everywhere  he  hears  complaints  that  from  three  to  four 
hundred  customs  officers,  whenever  a  State  convention  is  to  be  held, 
are  sent  or  go  into  the  different  counties  where  they  reside,  to  control 
the  electioa  of  delegates.  He  thinks  they  are  employed  for  weeks  be¬ 
fore  the  convention  in  such  missionary  work. 

Mr.  Greeley  pointed  to  individuals  who  were  employed  in  particular 
districts.  He  says  that  a  Mr.  Deew  patrols  Orange  County  ;  that  one 
Lewis  Lounsbury  “  pretty  much  governs  Madison  County.”  He  re¬ 
ferred  to  two  men  as  pretty  much  managing  Genesee  County,  but  he 
did  not  recollect  their  names.  He  thinks  that  custom-house  influence 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XXXIII 


was  never  so  much  employed  as  now.  He  thinks  that  this  influence  in 
the  convention  of  1804  was  not  known,  whereas  at  the  convention  of 
1870  many  delegates  were  changed  on  the  spot,  and  that  at  that  con¬ 
vention  he  believes  Mr.  Murphy,  the  collector,  practically  decided  who 
should  be  the  candidate  for  governor. 

Mr.  Whitelaw  Eeid  gave  the  names  of  officers  connected  with  the 
customs,  the  internal*  revenue,  postal  or  other  Federal  offices,  to  the 
number  of  some  sixty-five,  who  attended  the  convention  of  1871,  either 
as  delegates  or  as  visitors. 

General  Palmer,  the  late  appraiser  of  the  port,  expressed  the  opinion 
that  the  custom-house  influence  is  exerted  to  control  State  elections. 

Mr.  Van  Cleft,  who  was  removed  from  employment  in  the  navy-yard 
in  October,  1870,  expressed  the  belief  that  the  custom-house  officers 
controlled  the  convention  of  1871. 

Such  seemed  to  be  the  opinion  of  Mr.  Mudgett,  and  of  Mr.  C.  S. 
Grant. 

Mr.  Greeley  supplied  a  further  illustration  of  the  political  action  of 
the  custom-house,  by  expressing  the  opinion  that  those  officers  con¬ 
trolled  the  election  of  speaker  of  the  New  York  assembly  at  its  organ¬ 
ization  last  January.  He  says  fifty  or  sixty  of  those  officers  were 
present  at  the  opening  of  the  legislature.  He  thinks  appointments 
were  promised  and  removals  were  threatened  in  order  to  effect  the  result, 
and  that  they  did  effect  the  choice  of  Henry  Smith  for  speaker  over 
Mr.  Thomas  G.  Alvord 

It  was  even  represented  by  Mr.  Greeley  that  the  republican  party,  in 
the  State  of  New  York,  was  divided  into  factious,  which  are  known  as 
the  Conkling  and  the  Fenton  factions,  and  that  the  whole  weight  of  the 
custom-house  was  thrown  into  the  scale  of  the  Conkling  faction;  that 
Fenton  men  were  carefully  weeded  out  from  its  bureaus,  while  they 
were  crammed  with  adherents  of  the  rival  faction. 

This  is  not  altogether  a  satisfactory  picture  of  the  customs  service ; 
but  it  is  not  admitted  to  be  a  true  picture. 

It  is  not  denied,  but  is  admitted,  that  officers  of  the  customs,  many 
of  them,  sometimes  attend  political  conventions,  and  that  they  have 
always  done  so.  It  is  not  admitted,  nor  is  j. t  averted,  that  the  employes 
are  drafted  into  that  service.  On  the  contrary,  Mr.  Cornell,  Mr.  Murphy, 
Mr.  Laflin,  and  Mr.  O’Brien  state  that,  in  1871, -efforts  were  made  to  dis¬ 
courage  the  attendance  of  officers  at  the  convention. 

It  is  very  positively  denied  that  the  attendance  of  customs  officers 
upon  conventions  in  late  years  is  greater  than  it  formerly  was.  It  is 
insisted  by  several  witnesses  that  at  the  convention  of  18G4,  when 
the  honorable  Mr.  Fenton  was  nominated  for  governor,  there  was  a 
larger  attendance  of  officers  from  the  custom-house  than  has  been  usual 
of  late.  Mr.  Cornell,  after  consulting  the  records,  declares  there  were 
thirty-three  customs  officers  who  attended  the  convention  of  1804  as 
delegates.  He  believes  only  twenty  to  have  attended  the  convention  of 
1870,  and  he  asserts  positively  that  only  six  were  delegates  at  the  con¬ 
vention  of  1871.  The  same  witness  pronounces  Mr.  Greeley’s  informa¬ 
tion,  that  there  were  three  or  four  hundred  officials  traveling  through 
the  State  to  aid  in  the  election  of  delegates,  wholly  unfounded.  He 
admits  there  are  not  to  exceed  thirty  or  thirty-five  officials  of  the  cus¬ 
tom-house,  whose  residences  are  in  the  interior  of  the  State,  who  are  in 
the  habit  of  visitihg  their  homes  when  elections  are  held.  He  declares 
that  he  himself,  although  chairman  of  the  State  committee,  did  not 
leave  the  city  on  political  business  but  once  during  the  year  1871,  and 
that  was  to  attend  the  convention  at  Syracuse.  He  wholly  renudiates 
S.  Rep.  227 - hi 


XXXIV 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


the  idea  that  any  offices  were  promised  or  removals  threatened  in  order 
to  control  the  conventions  of  1870  or  1871.  Indeed  the  committee  feel 
compelled  to  reject  Mr.  Greeley’s  view  of  the  influence  of  the  custom¬ 
house  over  the  politics  of  New  York.  If  that  view  does  not  distort  the 
character  of  the  customs  officials  it  must  dishonor  the  people  of  New 
York.  It  does  not  seem  at  all  probable  that  the  people  of  New  York 
are  made  of  that  clay  which  a  few  weighers  from  the  custom-house  can 
fashion  into  such  vessels  as  they  please. 

Orange  County  has  a  population  of  80,000.  It  is  within  two  hours’ 
ride  of  the  city  of  New  York.  The  people  of  that  county  doubtless  visit 
the  city  occasionally,  and  occasionally  see  people  from  the  city.  Doubt¬ 
less  they  think,  and  talk,  and  read  newspapers. 

It  seems  altogether  probable  that  Mr.  Drew  might  “  patrol  ”  such  a 
county  very  constantly,  and  for  a  very  long  time,  without  making  any 
very  sensible  impressions  upon  the  convictions  of  its  people. 

Genesee  County  has  a  population  of  31 ,000.  That  is  quite  too  large 
a  command  to  be  “  managed  ”  by  any  two  officers  of  the  New  York  cus¬ 
tom-house. 

Madison  County  has  a  population  of  43,000.  If  Mr.  Lewis  Louns- 
berry  can  “govern”  that  county,  he  would  seem  to  be  fitted  for  some 
position  higher  than  that  of  a  weigher  in  the  New  York  custom-house. 
But  Mr.  Greeley  evidently  was  mistaken.  Somebody  must  have  imposed 
upon  his  credulity.  Mr.  Lounsberry  does  not  govern  Madison  County. 
He  does  not  even  live  in  it.  He  lives  in  the  county  of  Montgomery. 
He  is  said  to  be  a  pfetty  active  politician  there. 

Montgomery  County  is  not  so  large  as  Madison  County ;  it  has 
but  a  population  of  34,000.  But  even  that  number  is  too  many  for  Mr. 
Lounsberry.  The  evidence  shows  that  in  the  convention  of  1871,  the 
representation  from  Montgomery  County  was  not  in  harmony  with  Mr. 
Lounsberry.  Mr.  Greeley  would  seem  to  have  been  mistaken  also  when 
he  declared  that  Mr.  Murphy,  in  the  convention  of  1870,  practically 
decided  who  should  be  the  candidate  for  governor.  Mr.  Murphy  was 
not  a  delegate  to  that  convention,  but  he  did  attend  it.  He  declares  that 
so  far  as  he  tried  to  influence  the  action  of  the  convention  at  all,  it  was 
to  secure  the  nomination  of  Mr.  Greeley  himself  for  governor,  and,  so 
tar  as  can  be  learned  from  the  evidence,  every  officer  from  the  custom¬ 
house  who  attended  that  convention  labored  to  the  same  end.  And  yet 
not  only  Mr.  Murphy,  but  the  whole  phalanx  from  the  custom-house, 
were  signally  overthrown  by  the  result. 

Mr.  Greeley  was  equally  unhappy  in  his  attempt  to  illustrate  the 
influence  of  the  custom-house  by  his  reference  to  the  election  of  speaker 
in  January  last.  He  referred  to  Messrs.  Eastman  and  Goring,  of 
Dutchess  County,  to  Messrs.  Beckwith  and  Hungerford,  of  Oneida 
County,  and  to  Mr.  Fort  and  a  colleague  of  his  from  Oswego  County, 
as  members  who  were  seduced  from  allegiance  to  their  own  convictions 
by  the  influence  of  the  custom-house. 

But  Mr.  Eastman,  of  Dutchess,  appeared  before  the  committee  and 
declared  that  he  was  not  influenced  in  his  vote  by  any  person  whatever. 
Mr.  Goring  appeared  in  New  York  for  the  purpose  of  testifying,  but,  as 
the  committee  was  not  in  session,  his  evidence  was  not  obtained.  There 
was,  however,  what  purported  to  be  a  contradiction  of  Mr.  Greeley’s 
statements'  concerning  Mr.  Goring  in  the  columns  of  the  New  York 
Tribune  but  a  day  or  two  after  Mr.  Greeley  testified. 

Mr.  Beckwith  testified  as  follows: 

No  man,  to  my  recollection,  ever  asked  me  to  vote  for  Mr.  Smith  as  speaker.  My 
position  in  reference  to  that  matter  was  well  known  before  I  left  home  for  Albany.  I 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XXXV 


had  said  that  he  would  be  my  choice.  I  do  not  know  of  any  custom-house  official  that 
has  approached  me  in  my  life. 

Mr.  Fort,  of  Oswego,  was  equally  explicit  in  liis  denial  of  any  custom¬ 
house  or  other  extraneous  influence  affecting  his  vote.  He  also  declared 
upon  the  iu formation  of  his  colleagues  that  one  of  them  voted  for  Mr. 
Alvord,  while  one  voted  with  him  for  Mr.  Smith. 

Touching  the  matter  of  assessments  for  political  purposes,  much  testi¬ 
mony  was  given.  That  collections  were  made  for  such  purposes  from 
time  to  time  was  conceded.  Two  witnesses  speak  of  them  as  assess¬ 
ments. 

One  witness,  Mr.  W.  T.  Perkins,  came  from  Dover,  New  Hampshire.* 
Mr.  Perkins  had  had  the  misfortune  to  be  discharged  from  the  office  of 
a  weigher  in  the  customs  service. 

He  not  only  characterized  the  collection  as  an  assessment,  but  he 
swore  quite  positively  that,  so  far  as  he  was  concerned,  it  was  an  invol¬ 
untary  contribution ;  that  he  paid  it  only  because  he  felt  sure  that  if  he 
refused  to  pay  he  would  be  removed  from  his  office.  As  Mr.  Perkins  was 
removed  in  spite  of  his  contributions,  the  committee  had  no  reason  to 
doubt  that  he  would  have  been  removed  if  he  had  refused  to  contrib¬ 
ute.  But  the  committee  is  glad  to  believe  that  Mr.  Perkins  did  not 
Fairly  represent  in  his  conduct  the  patriotism  of  the  employes  in  the 
New  York  custom-house,  nor  did  he  fairly  represent  in  his  testimony 
the  disposition  which  actuates  the  chiefs  of  its  several  bureaus.  Mr. 
Perkins  admitted  that  he  never  knew  an  employe  to  be  removed  for 
refusing  to  contribute  to  election  funds.  The  only  witness  who  did 
assume  to  point  out  a  victim  to  such  exactions  was  Mr.  C.  T.  Lewis. 

He  expressed  the  opinion  that  Mr.  Gordon  L.  Ford,  who  had  been 
collector  of  internal  revenue  for  one  of  the  congressional  districts  in  the 
city  of  Brooklyn,  had  been  removed  for  refusing  to  submit  to  an  unrea¬ 
sonable  political  assessment.  But  that  incident  transpired  outside  of 
the  customs  service.  Besides,  it  seems  very  evident  that  Mr.  Lewis  did 
not  rightly  understand  the  incident.  Mr.  Maddox  testified  that  Mr. 
Ford  did  not  go  out  of  office,  although  he  desired  to  do  so,  until  his  dis¬ 
trict  wras  consolidated  with  two  others.  At  the  time  of  the  consolida¬ 
tion  Mr.  Ford  was  collector  of  one  of  the  districts,  Mr.  Freeland  was 
collector  in  another,  and  there  was  a  vacancy  in  the  third.  Mr.  Ford 
went  out  and  Mr.  Freeland  was  retained.  Mr.  Maddox  thinks  the  latter 
was  retained,  and  not  the  former,  because  the  former  had  wished  to  re¬ 
sign,  because  he  was  wealthy,  while  Mr.  Freeland  was  poor,  and  because 
Mr.  Henry  Ward  Beecher  desired  that  the  latter  should  be  retained. 

Mr.  Murphy  and  Mr.  Cornell  both  deny  that  any  coercion  or  any 
threats  were  employed  to  induce  contributions  from  the  subordinates. 
They  both  assert  that  all  contributions  were  voluntary.  Mr.  Cornell 
declared  that  superiors  were  not  employed  to  make  collections  of  infer¬ 
iors,  but  that  each  grade  regulated  its  own  contributions.  He  also  says 
that  his  subordinates  often  objected  to  contributing  upon  the  ground  of 
inability,  and  were  always  excused;  and  Mr.  Murphy  instanced  that 
when  a  collection  was  taken  up  for  the  campaign  of  1870,  but  $25,000 
were  received,  whereas  a  contribution  of  two  per  cent,  on  the  salaries 
would  have  yielded  $30,000. 

Mr.  Cornell  also  says  that,  in  18GG,wlien  he  was  a  member  of  the  State 
committee,  and  the  custom-house  was  controlled  in  opposition  to  the  re¬ 
publican  party,  the  subordinates  of  the  custom-house  voluntarily  con¬ 
tributed  many  thousands  to  the  expenses  of  the  campaign. 

General  Palmer  also  states  that,  when  he  was  appraiser,  a  collection 
was  made  for  the  benefit  of  the  republican  party  in  Connecticut,  and 


XXXVI 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


although  his  subordinates  were  notified  that  their  contributions  must  be 
entirely  voluntary,  a  large  contribution  was  made  by  them. 

The  committee  can  entertain  no  doubt  that  in  the  experience  of  polit¬ 
ical  parties,  as  in  that  of  religions  denominations,  money  is  sometimes 
needed.  There  can  be  no  doubt  that  members  of  the  party,  as  well  as 
members  of  the  church,  are  often  asked  to  contribute  to  such  needs. 
They  see  no  reason  why  those  who  draw  salaries  may  not  as  properly 
be  invited  to  contribute  as  those  who  do  not.  The  committee  has  no 
serious  apprehension  that  either  the  members  of  the  republican  party 
or  the  members  of  any'Christian  church  will  often  contribute  beyond 
►their  ability,  or  beyond  the  requirements  of  the  public  good,  and  when 
it  shall  appear  that  a  deserving  officer  shall  be  dismissed  the  service  of 
the  Government,  or  a  worthy  member  shall  be  dismissed  the  service  of 
the  church,  for  not  submitting  to  an  unreasonable  exaction,  it  will  be 
time  enough  to  restrain  such  contribution. 

It  is  proper  to  add  that  from  the  testimony  it  would  appear  that  all 
these  collections  are  made  either  for  disbursements  out  of  the  State  or 
for  the  aid  of  campaigns  organized  within  the  State,  and  not  to  control 
primary  meetings,  or  the  election  of  delegates. 

A  specific  charge  urged  against  the  political  action  of  the  New  York 
custom-house  is  that  its  patronage  is  controlled  in  the  interests  of  a  fac¬ 
tion  in  the  republican  party. 

Political  events  which  have  transpired  since  that  charge  was  made 
have  gone  far  to  refute  it. .  So  far  as  is  known  to  the  committee,  every 
individual  who  urged  that  accusation  is  now  arrayed  in  open  opposition 
to  the  republican  party. 

There  is  no  longer  any  known  faction  in  the  republican  party.  It  is 
not  yet  quite  certain  whether  those  who  in  January  last  aspired  to  that 
character  are  now  a  party  by  themselves,  or  are  only  a  faction  of  the 
democratic  party.  But  in  January  last,  and  later,  it  was  asserted  by 
Mr.  Greeley,  Mr.  Whitelaw  Reid,  Mr.  Van  Cleft,  and  others,  that  em¬ 
ployes  of  the  New  York  custom-house  were  habitually  removed  because 
they  adhered  to  the  so-called  Fenton  faction,  or  to  make  room  for  the 
adherents  of  the  so-called  Conkling  faction. 

Among  the  instances  cited  of  such  removals  are  those  of  General 
Merritt,  General  George  W.  Palmer,  Joseph  H.  Forbes,  T.  J.  Coutant, 
Samuel  Nash,  T.  G.  Rightmeyer,  W.  H.  Be  Camp,  John  Duke,  and  B. 
F.  Mudgett. 

The  witnesses  who  attributed  the  removal  of  these  gentlemen  to  their 
adherence  to  a  particular  faction  were  not  the  parties  who  caused  their 
removal.  They  could  not,  of  course,  know  the  reasons  which  influenced 
such  removal.  Other  and  very  different  reasons  were  assigned  by  those 
who  testified  on  behalf  of  the  custom-house  authorities. 

Mr.  Murphy,  Mr.  Cornell,  and  Colonel  Bliss  severally  affirmed  that 
most  of  those  officers  were  removed,  not  because  of  their  attachment 
to  Mr.  Fenton,  but  because  of  their  known  or  suspected  attachment  to 
that  political  organization  very  widely  and  not  very  favorably  known 
as  the  Tammany  party.  According  to  the  history  given  by  those  wit¬ 
nesses,  it  was  resolved  by  many,  if  not  by  most  of  the  republicans  of  the 
city  of  New  York,  in  the  autumn  of  1870,  to  attempt  a  redemption  of 
that  city  from  the  rule  of  the  Tammany  party.  They  believed  success 
to  be  hopeless  except  through  a  combination  of  the  republicans  with  a 
portion  of  the  democratic  party  known  as  the  Young  Democracy.  They 
therefore  endeavored  to  combine  with  that  portion  of  the  democracy  to 
elect  Mr.  Ledwith  for  mayor  against  Mr.  A.  Oakey  Hall.  This  endeavor 
was  opposed  by  a  portion  of  the  republicans. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XXXVII 


The  general  committee  of  the  republican  party  of  the  city  of  New 
York  is  composed  of  159  delegates,  chosen  by  the  twenty-one  several 
assembly  district  associations  in  proportion  to  the  number  of  republican 
voters  in  each  district.  That  general  committee  is,  according  to  the 
usages  of  the  party,  authorized  to  appoint  the  time  and  place  for 
holding  local  conventions,  and  the  times  and  places  for  choosing  dele¬ 
gates  to  all  conventions,  local  and  State.  The  friends  of  the  anti-Tam¬ 
many  movement  aimed  to  secure  a  republican  convention  for  the  city 
which  should  decline  to  put  a  republican  candidate  in  the  field,  and 
should  favor  the  election  of  Judge  Ledwith.  To  that  end,  early  in  Octo¬ 
ber,  1870,  at  a  meeting  of  the  general  committee  at  which  the  convention 
was  called,  two  resolutions  were  agreed  to. 

By  one  it  was  declared  that  no  person  holding  office  under  the  city 
government  should  be  eligible  as  a  delegate  to  a  republican  convention. 
The  other  provided  that  the  election  of  delegates  should  be  thereafter 
not  onfyy  certified  by  the  inspectors  of  election,  but  should  be  attested 
by  the  secretaries  of  the  association.  The  reason  urged  in  support  of 
the  last  innovation  was,  that  as  the  inspectors  of  election  were  ap¬ 
pointed  by  the  president  of  the  district  associations,  they  were  prac¬ 
tically  his  agents ;  that  as  their  certificate  was  conclusive  as  to  the 
result  of  an  election,  and  as  they  were  accustomed  to  consult  the  pleas¬ 
ure  of  the  president  rather  than  the  state  of  the  ballot,  it  practically 
gave  the  president  of  the  association  the  power  to  appoint  the  delegates 
to  any  and  every  convention. 

It  does  not  appear  that  the  first  resolution  excited  any  hostility,  and 
yet  that  resolution,  in  terms,  disqualified  every  republican  who  held 
office  under  the  city  government  for  representing  the  party  in  a  local 
republican  convention.  The  second  resolution  merely  aimed  at  putting 
a  slight  check  upon  the  power  of  the  president  of  the  association.  The 
adoption  of  that  resolution  was  resented.  It  was  resented  not  only  by 
a  portion  of  the  republican  party,  but  it-is  averred  that  it  was  resented 
by  the  chief  of  the  Tammany  Society.  A  special  meeting  of  the  general 
committee  was  called  at  once,  for  the  purpose  of  reconsidering  the  sec¬ 
ond  resolution.  A  very  sharp  struggle  seems  to  have  ensued  over  the 
question  of  its  repeal.  In  that  struggle,  it  is  alleged,  Mr.  Tweed  him¬ 
self  actively  participated.  Whether  the  fact  be  so  or  not,  there  seems 
to  be  no  room  for  doubt  that  it  was  very  generally  believed  to  be  so. 

The  following  was  given  to  the  committee  as  part  of  an  editorial  from 
the  New  York  Tribune  of  October  13,  1870  : 

A  few  plain  words  may  as  well  be  said  to  the  men  who  use  republican  place  for  the 
service  of  the  Tammany  ring.  They  were  badly  beaten  at  the  last  meeting  of  the  gen¬ 
eral  committee.  Since  then  Mr.  Tweed  has  come  home  in  alarm  and  issued  his  orders, 
and  all  these  Tammany  republicans  are  busy  as  beavers  trying  to  carry  them  out. 
Above  all  things,  urges  Mr.  Tweed,  the  republicans  must  be  forced  to  make  strict  party 
nominations.  To  this  end  a  sufficient  number  of  the  general  committee  must  be  bought, 
and  the  Tammany  republicans  are  all  at  work  trying  to  do  it.  What  we  wish  them  to 
understand  is,  that  this  game  has  been  played  for  the  last  time.  Men  cannot  longer 
use  the  offices  of  Tammany  to  purchase  action  in  republican  committees  without  expo¬ 
sure.  Whoever  does  this  thing  now  must  make  up  his  mind  to  go  straight  to  his  own 
pla^e,  with  Tammany  branded  across  his  forehead. 

Mr.  Cornell  testifies  that  lie  was  informed  by  two  different  parties, 
both  republicans,  that  Mr.  Tweed  had  sought  interviews  with  them, 
and  had  attempted,  both  by  persuasion,  by  promises,  and  by  purchase, 
to  enlist  their  aid  in  effecting  the  repeal  of  that  resolution. — (See  vol. 
1,  p.  545.) 

Mr.  J.  J.  O'Brien,  now  a  weigher  iu  the  customs,  and  who,  in  1870, 
was  president  of  the  eighth  assembly  district  association,  testified  to  an 
interview  which  he  himself  had  with  Mr.  Tweed,  at  the  request  of  the 


XXXVIII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


latter,  on  the  very  subject  of  the  repeal  of  that  resolution.  He  detailed 
the  arguments  urged  by  Mr.  Tweed,  the  inducements  presented,  the 
promises  made.  That  story  forms  an  interesting  chapter  of  political  his¬ 
tory  ;  and  yet  every  fact  in  it  is  so  clearly,  so  consistently,  and  so  can¬ 
didly  stated,  that  no  room  is  left  to  doubt  the  truth  of  his  narrative. — 
(See  vol.  3,  p.  482.) 

There  seems  to  be  no  doubt  that  both  Mr.  Murphy,  the  collector,  and 
Mr.  Cornell,  the  surveyor,  were  in  hearty  sympathy  with  that  combined 
movement  to  defeat  the  election  of  Mr.  Hail.  They  strenuously  upheld 
the  action  of  the  general  committee  at  its  first  meeting ;  they  as  stren¬ 
uously  opposed  the  repeal  of- the  resolution  directing  the  manner  of  cer¬ 
tifying  the  credentials  of  delegates. 

It  does  not  appear  that  General  Palmer,  the  appraiser,  or  Mr.  Grin¬ 
ned,  the  naval  officer,  participated  in  that  struggle,  but  whether  they 
did  or  not,  the  struggle  resulted  in  the  repeal  of  the  resolution.  The 
evidence  shows  that  Mr.  Forbes,  Mr.  Coutant,  Mr.  Nash,  Mr.  He  Camp, 
and  Mr.  Duke  were  active  in  carrying  .that  repeal. 

General  Palmer  testifies  that,  at  the  instance  of  General  Pleasonton, 
he  advised  Mr.  Forbes  and  Mr.  Coutant  that  they  might  endanger  their 
places  if  they,  did  support  that  repeal.  It  is  in  evidence  that  they  were 
removed  soon  after  that  struggle  came  to  an  end.  There  is  much 
reason  for  believing  they  were  removed  because  of  the  part  they  took 
in  it.  Mr.  Murphy,  although  his  recollection  is  quite  indistinct,  still  is 
of  the  impression  that  he  was  himself  applied  to  by  the  Secretary  of  the 
Treasury  to  know  if  any  officers  of  the  customs  did  lend  their  efforts  to 
aid  the  Tammany  success.  Other  officers  in  the  naval,  internal  revenue, 
and  postal  service  are  said  to  have  been  removed  at  or  about  the  same 
time.  All  of  them,  so  far  as  appears,  acted  in  concert  at  the  special 
meeting  of  the  general  committee;  all  met  the  same  fate,  and  about  the 
same  time. . 

The  committee  do  not  feel  called  upon  to  defend  or  to  condemn  those 
removals,  but  only  to  state  the  facts  concerning  them  so  far  as  they  can 
be  gathered  from  the  testimony. 

From  that  testimony  it  seems  quite  clear  that  no  question  of  party 
supremacy  was  involved  in  the  election  for  mayor  of  New  York  in  the 
autumn  of  1870.  It  was  a  question  of  good  or  bad  government  for  the 
city,  and  not  a  question  of  republican  or  democratic  domination  in 
the  city.  Republicans  and  democrats  were  in  the  city  government. 
The  republican  party  was  in  a  hopeless  minority  in  the  city.  They  had 
no  votes  to  spare.  Every  republican  voter  disaffected  in  the  city 
endangered  the  success  of  the  party  in  the  State,  and  yet  it  is  evident 
that  the  great  majority  of  the  republican  party  in  the  city  resolved  that 
*  whatever  might  be  the  party  perils,  those  associated  with  the  Tam¬ 
many  government  should  quit  that  association  or  be  excluded  from 
republican  councils. 

It  appears  from  the  testimony  that  Messrs.  Forbes,  Nash,  Coutant, 
Duke,  and  De  Camp,  as  well  as  others  removed  at  the  same  time  from 
other  departments  of  the  national  service,  were  very  promptly  provided 
for  under  the  government  of  the  city. 

Mr.  Rightmeyer’s  case  is  quite  different.  He  claims  that  he  was 
promised  before  the  primary  meetings,  in  1870,  an  appointment  to  an 
office  without  duties  to  discharge;  that  he  was  appointed  as  storekeeper; 
that  at  the  primary  meeting  he  did  not  act  in  harmony  with  Mr.  Mur¬ 
phy,  and  that  soon  after  he  was  removed.  Mr.  Murphy  avers,  on  the 
contrary,  that  the  Government  does  not  pay  storekeepers;  that  they 
are  paid  by  the  warehousemen,  each  warehouse  being  assessed  for  such 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XXXIX 


keepers  as  are  assigned  to  duty  at  it ;  that  no  warehouseman  would  pay 
for  a  storekeeper  who  did  not  take  charge  of  his  warehouse;  that  Mr. 
Eightmeyer  declined  to  take  charge  of  the  warehouse ;  that  accordingly 
he,  the  collector,  was  left  to  the  option  of  removing  him  or  of  paying 
him  out  of  his  own  pocket,  and  that  he  chose  the  former  alternative. 

It  does  not  very  distinctly  appear  from  the  testimony  why  General 
Merritt  was  removed,  but  as  he  was  succeeded  by  Mr.  Grinnell,  who 
does,  not  appear  to  have  been  identified  at  all  with  the  so-called  Conk- 
ling  faction,  that  change  should  be  explained,  if  at  all,  upon  some  other 
theory. 

]>lr.  Mudgett  flenies  that  he  was  removed  at  all,  but  that  he  resigned. 
He  tvas  appointed  a  weigher  by  General  Palmer.  In  less  than  a  month 
after  his  appointment  General  Palmer  was  removed. 

Mr.  Mudgett  himself  presents  the  most  plausible  explanation  of  the 
causes  of  that  removal.  He  infers  that  it  was  prompted  by  resentment 
at  his  own  appointment.  He  affects  to  believe  that  that  resentment 
was  inspired  by  the  suspicion  that  he  was  unfriendly  to  the  administra¬ 
tion.  If  there  was  any  such  resentment,  the  testimony  reveals  a  more 
specific  and  substantial  cause  for  it.  Mr.  Mudgett  himself  reveals  the 
fact,  as  communicated  to  him  by  Mr.  John  Bussell  Young,  that  the 
President  had  complained  of  Mr.  Mudgett’s  having  asserted,  at  Wil¬ 
lard’s  Hotel,  in  Washington,  that  he  knew  of  a  draft  for  $35,000  having 
been  sent  to  General  Porter  by  those  who  had  the  general-order  busi¬ 
ness  in  New  York,  to  be  divided  between  Porter  and  the  President. 
Mr.  Mudgett  denies  having  made  any  such  statement. 

Although  the  fact  of  that  complaint  only  appears  in  the  testimony  of 
Mr.  Mudgett,  and  there  only  as  a  communication  from  another,  yet  there 
is  very  satisfactory  evidence  that  if  the  President  did  not  make  such 
complaint,  he  had  reason  to  make  a  very  similar  one.  Colonel  Legrand 
B.  Cannon,  whose  veracity  is  not  likely  to  be  questioned  wherever  he  is 
known,  testified  that  Mr.  Mudgett  did  tell  him  that  he  knew  of  his  own 
knowledge  that  General  Porter  did  receive  a  portion  of  the  general-order 
business  ;  that  Senator  Patterson  had  seen  the  canceled  checks,  which 
proved  the  fact ;  that  he  had  himself  charged  General  Porter  with  it  in 
Washington,  and  told  him  he  could  prove  it.  Colonel  Cannon  also  tes¬ 
tified  that  he  reported  to  Colonel  Bliss,  shortly  after  it  was  made,  the 
communication  received  from  Mr.  Mudgett;  that  he  then  repeated  it 
precisely  as  he  understood  it  at  the  time,  and  that  he  authorized  Colonel 
Bliss  to  make  any  use  of  it  he  thought  proper.  Colonel  Bliss  testified 
that  Colonel  Cannon  repeated  to  him  Mr.  Mudgett’s  statement ;  that  he 
immediately  made  a  memorandum  of  it  in  writing,  and  a  few  days  after- 
terward  he  communicated  it  to  Collector  Murphy  by  letter.  That  letter 
was  sent  to  General  Porter.  That  letter  is  in  evidence,  and  whatever 
may  be  the  differences  in  the  recollection  pf  Mr.  Mudgett  and  Colonel 
Cannon  as  to  the  former’s  precise  statement,  the  letter  shows  conclusive¬ 
ly  the  version  which  was  communicated  to  General  Porter.  That  letter 
is  as  follows : 

Custom-House,  New  York, 

Collecto}'’s  Office. 

My  Dear  Murphy:  Mr.  B.  F.  Mudgett  recently  stated  at  the  Union  League  Club 
that  he  knew  that  General  Porter  was  interested  in  the  public-store  business  ;  that  Mr. 
Bixby  had  shown  him — Mudgett — a  check,  or  checks,  for  the  amount  of  $30,000,  which 
were  given  for,  or  represented  in  some  way.  General  Porter’s  interest  in  that  matter, 
and  that- these  checks  bore  General  Porter’s  indorsement;  that  further,  he — Mudgett — 
had  had  an  interview  with  General  Porter  at  the  latter’s  request,  and  that  Mudgett 
had  there  repeated  the  general  statement  of  interest,  and  that  General  Porter  had  not 
denied  it.  My  informant  is  Colonel  Legrand  B.  Cannon,  to  whom  Mudgett  said  it. 
and  it  was  not  said  confidentially.  Colonel  Cannon,  being  not  familiar  with  custom- 


XL 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


house  matters,  does  not  remember  whether  Mudgett  referred  to  general-order  business, 
or  cartage,  or  to  labor,  but  understood  him  to  use  the  words  public  stores.  Of  course, 
all  this  is  a  lie  on  Mudgett’s  part,  but  such  specific  statements  made  in  such  a  place  do 
harm.  I  think  it  would  be  the  part  of  kindness  to  enable  General  Porter  to  meet  these 
statements,  but  I  do  not  know  him  well  enough  to  introduce  the  matter. 

Yours,  truly, 

GEORGE  BLISS,  Jr. 

Hon.  Thomas  Murphy. 

There  can  be  no  rational  doubt  that  Mr.  Mudgett  made  substantially 
those  statements ;  there  can  be  no  rational  doubt  that  the  President 
believed  he  made  those  precise  statements,  and  it  should  occasion  no 
surprise  that  the  President  would  not  and  could  not  brook  the  employ¬ 
ment  of  a  man  who  was  so  openly  and  so  injuriously  traducing  ope  who 
was  holding  such  conlidential  relations  with  himself  as  General  Porter 
did. 

Other  instances  of  factious  removals  were  cited  by  Mr.  Whitelaw 
Reid  and  other  witnesses.  The  real  cause  of  these  removals  is  not  au¬ 
thoritatively  explained.  But  upon  the  alleged  factious  conduct  of  the 
custom-house  officers,  the  following  statistics  are  furnished  from  the 
records  of  the  custom-house.  During  the  eollectorship  of  Mr.  Grinnell 
twenty-eight  appointments  were  made  in  the  custom-house  upon  the  re¬ 
commendation  of  Senator  Fenton ;  of  those  eighteen  were  in  office 
when  the  record  was  produced.  Seven  were  appointed  during  the  same 
term  on  the  recommendation  of  Senator  Conkling,  of  whom  two  only 
remained.  On  the  joint  recommendation  of  the  two  Senators  eleven 
were  appointed,  of  whom  six  remained.  It  also  appears  that  during  the 
same  term  fifteen  appointments  were  made  upon  the  recommendation 
of  Mr.  Greeley,  of  whom  six  remain.  It  is  further  shown  that  under 
the  admimistration  of  Collector  Murphy,  Mr.  Greeley  recommended  but 
one  appointment.  That  one  appointment  was  made.  Neither  Senator 
Conkling  nor  Senator  Fenton  made  any  recommendations  under  the 
administrations  of  either  Murphy  or  General  Arthur. 

It  is,-  perhaps,  due  to  the  present  and  to  the  late  collector  of  the  port 
of  New  York  that  attention  should  be  called  in  this  report  to  the  em¬ 
phatic  testimony  borne  by  several  distinguished  merchants  to  the  merits 
of  their  respective  administrations. 

George  C.  Collins,  who  has  for  many  years  been  a  large  importer  of 
teas  and  sugars,  paying  duties  to  the  Government  annually  to  the 
amount  of  some  $550,000,  said,  in  reply  to  an  interrogatory  by  the 
chairman : 

I  have  never  had  any  difficulty  with  the  Government,  in  any  way  or  shape,  in  rela¬ 
tion  to  my  goods,  more  than  ordinarily  occurs  as  to  matters  of  account,  particularly  on 
teas,  on  which  the  duty  is  fixed,  so  that  there  is  very  little  difficulty  attending  that. 

When  asked,  u  Have  all  the  differences  of  opinion  of  which  you  have 
spoken  in  regard  to  sugar,  been  satisfactorily  adjusted1?”  he  answered, 
uO,  yes,  sir;  it  is  a  pretty  difficult  thing  to  take  up  an  invoice  of 
sugars  and  enter  them,  with  your  samples  from  abroad,  and  find  them 
all  come  out  precisely  as  the  samples  would  indicate;  but  there  has 
been  no  difficulty  with  the  appraisers  in  arranging  such  matters  satis¬ 
factorily.  Errors  have  always  been  corrected  with  great  promptness, 
and  they  have. been  as  often,  perhaps,  on  one  side  as  on  the  other,  so  far 
as  I  am  concerned.” 

Mr.  A.  T.  Stewart  gave  the  following  testimony : 

By  Mr.  Bayard  : 

Q.  I  understand  you  to  say  that  your  habit  was  not  to  make  complaints  here.  Where 
did  you  make  your  complaints  ? — A.  I  had  nothing  to  complain  of.  So  far  as  the  inte- 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XLI 


rior  workiDgs  of  this  establishment  go,  I  have  never  had  anything  to  complain  of.  I 
have  always  had  civility  and  attention,  and  my  business  conducted  just  as  well  as  I 
ought  to  expect  it  under  existing  circumstances. 

By  Mr.  Casserly  : 

Q.  You  say  that  with  a  qualification,  under  existing  circumstances.  What  do  you 
mean  by  that  ? — A.  I  mean  this :  A  steamer,  for  instance,  arrives,  and  I  do  not  happen 
to  get  my  entry  made  out  as  early  as  some  others  ;  there  are  twenty  people  before  me  ; 
I  take  my  turn  in  the  line,  or  put  my  young  man  there,  or  whoever  attends  to  my  cus¬ 
tom-house  business,  and  wait  until  lie  goes  up  to  the  desk  of  the  deputy  collector  who 
passes  the  entry. 

■*##**** 

Q.  Did  you  suggest  to  him  [meaning  Mr.  Murphy]  that  that  was  a  grand  opportu¬ 
nity  ?— A.  Yes,  sir;  a  grand  opportunity  to  make  every  importing  merchant  his  friend. 

Q.  Did  you  ever  hear  that  he  availed  himself  of  that  opportunity,  or  took  any  steps 
toward  it ?— A.  I  think  not;  still,  I  must  say,  so  far  as  my  experience  has  been,  Mr. 
Murphy  conducted  the  business  as  well  as  any  one  else  that  has  recently  been  in  the 
place. 

Q.  What  business  do  you  refer  to  ? — A.  The  business  of  collector  of  the  port  of  New 
York.  I  have  no  hesitation  in  saying  that. 

Mr.  H.  B.  Claflin  testified  : 

I  never  heard  much  dissatisfaction.  Occasionally  there  is  some  complaint  that 
comes  to  me ;  but  perhaps  all  the  complaints  do  not  reach  me,  because  they  know  I 
know  very  little  about  it.  I  always  tell  them  to  go  to  the  collector  and  get  redress 
wherever  they  can,  and  to  report  these  things  to  the  authorities. 

Mr.  Hutton  gave  this  testimony : 

Q.  You  testified  before  the  committee  on  investigation  on  the  17th  of  January  of  last 
year,  did  you  not  ? — A.  I  did. 

Q.  I  believe  in  that  examination  you  paid  a  compliment  to  the  general  improvement 
in  the  custom-house  management  since  your  acquaintance  with  it.— A.  If  I  did  not 
I  should  have  done  so. 

Q.  I  see  in  one  passage  of  your  testimony  this  clause  occurs  :  “  I  think  that  there  are 
better  men  in  the  custom-house  at  this  moment  than  there  have  been  in  five  or  six 
years,  and  than  I  have  ever  known  in  the  department  in  all  my  experience.” 

Again : 

“There  is  no  longer  the  same  looseness  in  the  manner  of  doing  business  that  existed 
years  ago  ;  all  that  has  been  improved  and  systematized  ;  a  great  many  abuses  have 
been  corrected  and  a  decided  effort  has  been  made  to  insure  the  collection  of  the  reve¬ 
nue.”  Do  you  still  adhere  to  that  ? — A.  So  far  as  my  observation  goes  that  was  my 
opinion  at  that  time,  and  I  have  no  reason  to  change  the  statement  now. 

Mr.  Peter  N.  Moor?,  the  agent  of  Phelps,  Dodge  &  Co.,  testified  : 

Q.  Have  you  had  anything  to  do  with  the  appraiser’s  department  ? — A.  Yes,  sir. 

Q.  Well,  how  is  that  conducted  ? — A.  Nothing  to  complain  of  whatever.  My  busi¬ 
ness  in  the  custom-house  has  been  all  through  of  the  very  best  character,  and  I  have 
had  no  reason  to  complain. 

Other  testimony  from  the  same  witness  to  the  same  effect  will  be 
found  on  the  96th  page  of  the  second  volume  of  the  testimony. 

The  instructions  of  this  committee  seem  to  be  limited  to  the  taking  of 
testimony  and  reporting  facts.  It  is,  perhaps,  hardly  authorized  to  sug¬ 
gest  changes  in  the  customs  service.  The  committee  feel,  also,  that 
much  of  the  testimony  submitted  is  of  a  kind  too  partial  and  partisan 
to  be  the  foundation  of  well-considered  reform.  The  committee  cannot, 
however,  refrain  from  calling  attention  to  the  very  valuable  suggestions 
contained  in  the  report  submitted  to  the  New  York  Chamber  of  Com¬ 
merce  by  a  committee  of  which  the  Hon.  F.  A.  Conkling  was  chairman, 
and  which  has  been  already  referred  to  in  this  report.  Some  of  the 
recommendations  contained  in  that  paper  this  committee  would  not  be 
inclined  to  approve. 

We  are  not  satisfied  that  it  would  be  wise  to  exempt  the  merchant 
from  giving  bonds  for  the  duties  on  his  warehoused  goods,  or  to  remit 
the  interest  on  goods  which  have  been  in  the  warehouse  for  a  year.  But 
S.  Rep.  227 - iv 


XLI1  NEW  YOEK  CUSTmi-HOUSE  INVESTIGATION. 

this  committee  concurs  in  tlie  suggestion  of  a  commission,  to  be  Ap¬ 
pointed  by  the  Secretary  of  the  Treasury,  to  revise  the  whole  service 
and  remodel  it  so  far  as  shall  be  found  necessary. 

From  the  investigations  of  such  a  commission,  reforms  might  be  con- 
tidently  expected  which  could  not  be  rationally  hoped  for  from  the  in¬ 
quiry  referred  to  this  committee.  When  such  an  investigation  is  had, 
it  is  believed  that  all  the  questions  raised  touching  compromises,  the 
seizure  of  goods,  the  seizure  of  vessels,  the  seizure  of  books  and  papers, 
the  sale  of  unclaimed  goods,  damage  allowances,  the  extra  returns  of 
weighers,  night-permits,  the  extension  of  time  for  paying  duties  to  the 
cashier,  the  liability  of  warehousemen  for  goods  lost  from  their  custody, 
the  propriety  of  custom-house  oaths,  may  be  satisfactorily  adjusted. 

But  without  waiting  for  such  investigation  this  committee  ventures 
to  submit  two  recommendations:  Moieties  should  not  be  allowed  to 
officers  of  the  customs,  except  in  the  case  of  smuggled  goods  seized.  It 
is  flie  duty  of  these  officers  to  assess  and  collect  the  duties  on  imports. 
It  is  their  business  not  to  permit  any  frauds  upon  the  revenue.  Attempts 
will  be  made  to  introduce  merchandise  upon  our  markets  without  pay¬ 
ment  of  duty  at  all.  Whoever  defeats  an  attempt  at  smuggling  should 
be  allowed  at  least  one-half  the  net  proceeds  of  the  goods  condemned. 
But  when  goods  are  entered  at  the  custom-house  there  should  be  no 
cheating  in  quantities  or  values.  It  is  the  duty  of  the  officers  of  the 
customs  to  prevent  that.  Their  salaries  should  be  adequate  to  all  the 
labor  they  perform  and  all  the  responsibility  they  assume.  Still,  in  spite 
of  diligence  and  fidelity,  they  will  be  sometimes  circumvented.  But  the 
Government  should  not  bribe  them  to  be  defrauded  by  holding  up  to 
them  great  fortunes  for  detecting  the  fraud.  The  husbandman  who 
pays  his  harvester  a  meager  salary  for  gathering  grain,  but  otters  him 
one-half  for  gleaning  all  that  his  own  rake  passes  over,  should  not  be 
surprised  to  learn  that  his  servant  rakes  slovenly.  If,  in  spite  of  all 
the  vigilance  and  fidelity  that  can  be  secured  in  the  custom  house, 
frauds  are  perpetrated,  other  agenti  of  the  Government  should  be 
stimulated  to  ferret  them  out  and  expose  them,  and  if  they  do  not 
always  uncover  their  heads  while  investigating  such  alleged  frauds,  as 
if  is  complained  some  of  the  special  agents  of  the  treasury  do  not,  it  is 
probably  better  to  tolerate  even  that  outrage  upon  good  manners 
rather  than  allow  the  frauds  to  go  on  unpunished. 

Assistant  appraisers  and  examiners  in  the  public  stores  should  be  ex¬ 
perts.  That  is. manifest.  It  is  quite  as  manifest  that  to  be  experts  they 
not  only  must  have  studied,  but  they  must  not  cease  to  study.  The 
longer  they  practice  their  profession  the  more  expert  they  will  become. 
In  order  to  adjust  the  values  of  many  commodities  imported,  a  life-time 
of  study  is  none  too  much.  And  it  is  unquestionably  true  that  every 
year  added  to  one’s  experience  adds  to  his  competency.  They  should 
be  appointed  only  upon  lull  written  and  recorded  proof  of  unexception¬ 
able  character,  and  of  a  certain  acquaintance  with  the  commodities 
which  they  are  called  upon  to  appraise.  When  appointed  they  should 
have  a  salary  adequate  to  their  support.  They  should  be  continued  in 
office  uutil  convicted  of  misconduct,  or  until  mentally  or  physically  dis¬ 
abled.  WM.  A.  BUCKINGHAM. 

I).  J).  PRATT. 

T.  O.  HOWE. 

WM.  M.  STEWART. 


SENATE  COMMITTEE  ON  INVESTIGATION  AND  RETRENCHMENT, 


VIEWS  OF  THE  MINORITY. 


June  10,  1872. — Ordered  to  be  printed.  (To  accompany  report  No.  227.) 


On  December  18,  1871,  in  tbe  Senate,  it  was  resolved  that’  tbe  fol¬ 
lowing  named  Senators  constitute  tbe  Committee  on  investigation  and* 
Ketrenchment :  Messrs.  Buckingham,  Pratt,  Howe,  Harlan,  Stewart, 
Pool,  Bayard,  and  Casserly.  Mr.  Pool  resigned,  and  Mr.  Harlan  was 
obliged  to  be  absent  from  nearly  all  tbe  meetings  of  tbe  committee. 

On  December  19, 1871,  tbe  Senate  adopted  tbe  following 

RESOLUTION  IN  REGARD  TO  THE  NEW  YORK  CUSTOM-HOUSE. 

Whereas  it  has  been  declared  in  the  Senate  that  at  the  port  of  New  York  there 
exists,  and  is  maintained  by  officers  of  the  United  States,  under  the  name  of  the  general- 
order  business,  “  a  monstrous  abuse,”  fraudulent  in  character ;  and  whereas  the  fol¬ 
lowing  statement  has  been  made  by  a  Senator  : 

u  It  was  intimated  by  some  of  the  witnesses  that  Mr.  Leet,  who  pockets  the  enormous 
profits  arising  from  that  business,  had  some  connection  with  the  White  House ;  but 
General  Porter  was  examined,  Mr.  Leet  himself  was  examined,  and  they  both  testified 
that  it  was  not  so  ;  and  counting  the  number  of  the  witnesses,  we  have  no  right  to  form 
a  different  conclusion.  But  the  fact  remains  that  this  scandalous  system  of  robbery  is 
sustained — is  sustained  against  the  voice  of  the  merchants  of  New  York — is  sustained 
against  the  judgment  and  the  voice  of  the  Secretary  of  the  Treasury  himself.  I  ask 
you,  how  is  it  sustained?  Where  and  what  is  the  mysterious  power  that  sustains  it? 
The  conclusion  is  inevitable  that  it  is  a  power  stronger  than  decent  respect  for  public 
opinion — nay,,  a  power  stronger  than  the  Secretary  of  the  Treasury  himself :  ” 

Therefore, 

Resolved,  That  the  Committee  on  Investigation  and  Retrenchment  be  instructed  to 
inquire  into  the  matter  fully  and  at  large,  and  particularly  whether  any  collusion  or 
improper  connection  with  said  business  exists  on  the  part  of  any  officer  of  the  United 
States,  and  that  said  committee  further  inquire  whether  any  person  holding  office  in 
the  custom-house  at  New  York  has  been  detected  in,  or  is  known  or  believed  by  his 
superior  officer  to  have  been  guilty  of,  bribery,  or  of  taking  bribes,  .or  of  other  crime  or 
misdemeanor. 

And  said  committee  is  hereby  empowered  to  send  for  persons  and  papers.. 

And,  also,  whether  any  charges  for  storage  or  carting  have  been  or  are  made  by 
officers  of  the  custom-house,  or  persons  acting  under  the  regulations  of  the  custom¬ 
house,  which  charges  are  not  authorized  by  law  ; 

And,  also,  whether  presents  have  been  accepted  by  officers  of  the  custom-house 'from 
other  officers  subordinate  to  them  or  acting  under  their  control,  and  whether  officers 
making  such  presents  have  been  selected  with  preference  to  attend  the  discharging  of 
steamships ; 

And,  also,  whether  there  have  been  or  are  officers  of  the  custom-house  conniving  at 
frauds  or  irregular  practices  in  passing  the  baggage  of  travelers  arriving  in  the  port  of 
New  York ; 

And,  also,  whether  articles  of  merchandise,  while  under  the  control  of  officers  of 
the  custom-house,  have  been  abstracted,  and  whether  or  not  such  articles  have,  on  ap¬ 
plication  of  the  owners  in  several  cases,  been  returned,  and  whether  any  officers  of 
the  custom-house  have  been  punished  for  abstracting  articles  of  merchandise  under 
their  control ; 

And,  also,  to  what  extent  the  practice  of  compromising  with  merchants  defrauding 
or  attempting  to  defraud  the  revenue  has  prevailed*  and  whether  and  to  what  extent 
by  such  compromises  the  amount  of  revenue  due  to  the  United  States  in  such  cases 
has  been  diminished,  and  whether  any  and  what  pecuniary  benefit  has  been  derived 
therefrom  by  the  officers  making  such  compromises  \ 

S.  Rep.  227 - v 


XLIV 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Also,  whether  the  patronage,  officers,  or  employes  of  said  custom-house  were  used  to 
influence  or  control  either  or  both  of  the  two  last  State  conventions  of  the  republican 
party  in  New  York,  and  whether  assessments  of  money  have  been  made,  or  contribu¬ 
tions  of  money  exacted,  to  be  used  to  control  primaries,  secure  delegates  to  State  con¬ 
ventions,  or  for  other  political  purposes,  and  whether  any  of  the  said  officers  in  said 
custom-house  have  been  or  ar©  used  as  instruments  of  political  or  party  patronage. 

On  the  same  and  subsequent  days,  the  Senate  adopted  other  resolu¬ 
tions  for  general  inquiry  into  recent  defalcations  in  the  Treasury  De¬ 
partment  ;  the  methods  of  accountability  of  public  officers  charged  with 
the  keeping  or  disbursing  of  the  public  moneys ;  the  reduction  of  need¬ 
less  offices  and  of  expenditures  5  the  alleged  payment  of.  moneys  on 
account  of  any  asserted  lease  of  the  Bay  of  Samana,  and  the  agencies 
and  circumstances  6f  the  same  ;  and  other  similar  subjects  of  inquiry. 

All  these  resolutions  were  referred  to  the  same  committee. 

Proceedings  were  had  and  testimony  taken  by  the  committee  under 
but  one  of  the  resolutions — that  printed  above  in  full,  which,  it  has  been 
'seen,  relates  to  the  affairs  of  the  New  York  custom-house. 

THE  NEW  YORK  CUSTOM-HOUSE. 

The  undersigned,  members  of  the  Committee  on  Investigation  and 
Retrenchment,  to  whom  was  referred  the  above  resolution  relating  to* 
alleged  abuses  in  the  New  York  custom-house,  and  who  were  also  charged 
with  the  consideration  of  matters  referred  to  them  by  the  Senate  by 
other  resolutions,  (in  regard  to  which,  however,  no  action  whatever  has 
as  yet  been  taken  by  the  said  committee,)  were,  on  Saturday  last,  June 
1,  greatly  surprised  to  find  that,  without  previous  intimation  of  the  fact 
to  them,  or  consultation  with  them,  a  report  had  been  already  pre¬ 
pared  which  was  on  that  day  adopted  by  the  majority,  upon  that  por¬ 
tion  of  the  matters  referred  to  them  that  is  contained  in  the  above 
resolution. 

The  testimony  taken,  even  on  this  part  of  the  subject,  could  not  be 
considered  as  closed,  as  witnesses  were  examined  until  as  late  as  Satur¬ 
day,  May  25,  1872,  and  the  testimony  of  some  of  the  witnesses  still 
remains  unpublished. 

The  majority  report  in  manuscript,  was  presented  in  the  committee, 
and  read  on  the  morning  of  Saturday  June  1, 1872,  in  what  were  believed 
to  be  the  closing  hours  of  the  session — the  final  adjournment  of  Congress 
having  been  fixed  fbr  Monday,  June  3,  at  noon — and  when  one  of  the 
undersigned  (Mr.  Bayard)  had  been  and  was  actually  and  closely  engaged 
in  a  committee  of  conference  upon  the  tariff  bill.  Consequently  there 
was  no  reasonable  opportunity  to  examine  and  sift  the  report,  but  only 
to  obtain  a  summary  view  of  its  conclusions. 

From  these  the  undersigned  are,  in  the  main,  compelled  entirely  to 
dissent. 

It  is  thought  proper  to  mention  the  circumstances  attending  the 
the  submission  of  the  report  of  the  majority,  and  the  preparation  of 
these  views  of  the  minority,  in  order  to  account  for  any  incompleteness 
which  may  be  found  in  our  review  of  this  extended  investigation  and 
of  the  testimony,  containing  upward  of  two  thousand  two  hundred 
closely-printed  pages,  and  relating  to  varied  and  important  subjects. 

THE  COLLECTOR  OF  CUSTOMS  AT  NEW  YORK. 

^New  York  City  is  the  great  gate  of  our  national  commerce,  at  which 
three-fifths  and  upward  of  the  entire  imports  of  the  Union  are  received. 
The  custom-house,  in  which  all  the  accounts  of  this  vast  business  are 
concentrated,  is  an  institution  of  such  magnitude  that  its  cajjacities  and 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XLV 


proportions  cannot  well  be  conceived  without  laborious  and  intelligent 
examination.  The  position  of  collector  of  the  port  of  New  York  is  one 
demanding  a  high  order  of  ability,  combined  with  large  business  experi¬ 
ence,  a  large  mental  culture,  and,  above  all,  high-toned  probity  in  the 
incumbent.  In  him  are  vested  by  law  such  large  powers  and  discre¬ 
tion,  not  only  in  the  selection  and  control  of  his  subordinates,  but  in 
the  construction  and  summary  application  of  the  revenue  laws,  that 
the  effects  of  his  delinquencies  or  deficiencies,  want  of  capacity  or  of 
character,  will  be  felt  injuriously  not  only  upon  the  tone  of  public 
service  around  him,  or  by  the  mercantile  communities  of  New  York, 
but  throughout  the  entire  country.  It  is  in  this  view  that  the  chief 
officer  of  customs  at  the  port  of  New  York  becomes  an  official  scarcely 
second  to  a  member  of  the  Cabinet  in,  national  importance. 

We  propose  to  consider,  as  nearly  as  possible,  seriatim ,  the  several 
heads  of  the  resolution  relating  to  alleged  abuses  in  the  management  of 
the  New  York  custom-house. 

THE  GENERAL- ORDER  SYSTEM. 

The  first  head  is  as  follows : 

Whereas  it  has  been  declared  in  the  Senate  that  at  the  port  of  New  York  there  exists, 
and  is  maintained  by  officers  of  the  United  States,  under  the  name  of  the  general-order 
business,  “ a  monstrous  abuse/’ fraudulent  in  character;  and  whereas  the  following 
statement  has  been  made  by  a  Senator  : 

“  It  was  intimated  by  some  of  the  witnesses  that  Mr.  Leet,  who  pockets  the  enor¬ 
mous  profits  arising  from  that  business,  had  some  connection  with  the  White  House  ; 
but  General  Porter  was  examined,  Mr.  Leet  himself  was  examined,  and  they  both  testi¬ 
fied  that  it  was  not  so  ;  and,  counting  the  number  of  the  witnesses,  we  have  no  right  to 
form  a  different  conclusion.  But  the  fact  remains  that  this  scandalous  system  of  rob¬ 
bery  is  sustained — is  sustained  against  the  voice  of 'the  merchants  of  New  York — is  sus¬ 
tained  against  the  judgment  and  the  voiceof  the  Secretary  of  the  Treasury  himself.  I  ask 
you,  how  is  it  sustained  ?  Where  and  what  is  the  mysterious  power  that  sustains  it? 
The  conclusion  is  inevitable  that  it  is  a  power  stronger  than  decent  respect  for  public 
opinion — nay,  a  power  stronger  than  the  Secretary  of  the  Treasury  himself 

Therefore, 

Resolved,  That  the  Committee  on  Investigation  and  Retrenchment  be  instncted  to  in¬ 
quire  into  the  matter  fully  and  at  large,  and  particularly  whether  any  collusion  or 
improper  connection  with  said  business  exists  on  the  part  of  any  officer  of  the  United 
States,  and  that  said  committee  further  inquire  whether  any  person  holding  office  in 
the  custom-house  at  New  York  has  been  detected  i»,  or  is  known  or  believed  by  his 
superior  officer  to  have  been  guilty  of,  bribery,  or  of  taking  bribes,  or  of  other  crime  or 
misdemeanor. 

And  said*committee  is  hereby  empowered  to  send  for  persons  and  papers. 

And,  also,  whether  any  charges  for  storage  or  carting  have  been  or  are  made  by  of¬ 
ficers  of  the  custom-house,  or  persons  acting  under  the  regulations  of  the  custom-house, 
which  charges  are  not  authorized  by  law. 

ORIGIN  OF  THE  GENERAL  ORDER. 

Under  the  warehouse  law  of  March  7,  1854,  will  be  found  the  author¬ 
ity  for  storing  goods  in  bond  in  private  warehouses,  instead  of  public 
warehouses,  as  had  previously  been  allowed  under  the  law  of  184G. 
The  first  section  of  this  law  provides  th^t,. before  any  private  warehouse 
shall  become  a  bonded  warehouse,  it  shall  be  previously  approved  by  the 
Secretary  of  the  Treasury,  and  then  placed  in  charge  of  a  proper  officer 
of  the  customs,  who,  together  with  the  owner  or  proprietor  of  the  ware¬ 
house,  shall  have  joint  custody  of  the  warehouse  and  merchandise, 
always,  however,  under  the  supervision  of  the  officer  and  at  the  owner’s 
expense.  It  is  also  provided  that,  in  the  discretion  of  the  Secretary  of 
the  Treasury,  cellars  apd  vaults  may  be  used  for  such  purposes  and  in 
like  manner. 

Section  2  provides  that  unclaimed  goods  may  be  stored  in  such  bonded 


XLVI 


NEW  YOEK  CUSTOM-HOUSE  INVESTIGATION. 


warehouses  as  are  described  in  section  1,  and  that  all  charges  for  cart¬ 
age,  storage,  and  labor  shall  not  exceed  in  any  case  the  regular  rates 
for  such  objects  at  the  port  in  question. 

Section  3  provides  for  the  bond  to  be  taken  from  the  owner  or  lessee 
of  the  warehouse,  which  is  in  all  cases  to  be  approved  by  the  Secretary 
of  the  Treasury. 

Section  9  provides  “  that  the  Secretary  of  the  Treasury  be,  and  is 
hereby,  authorized  from  time  to  time  to  establish  such  rules  and  regula¬ 
tions,  not  inconsistent  with  the  laws  of  the  United  States,  for  the  due 
execution  of  this  act,  as  he  may  deem  to  be  expedient  and  necessary ; 
and  all  acts  and  parts  of  acts  conflicting  with  this  act  are  hereby  re¬ 
pealed.” 

SECRETARY  OF  THE  TREASURY  HAS  THE  CONTROL  OF  THE  SUBJECT. 

It  will  thus  be  seen  that  the  whole  system  of  bonded  warehouse  regu¬ 
lations,  including  the  custody  of,  and  charges  upon,  “  unclaimed  goods”— - 
that  is,  goods  which,  not  being  specially  permitted  within  48  hours  after  the 
arrival  of  the  vessel,  are,  by  a  “general  order”  of  discharge,  sent  to  a 
bonded  warehouse  designated  for  the  reception  of  such  goods  as,  not 
having  been  specially  permitted  to  land,  are  therefore  to  be  kept  in  the 
custody  of  the  Government  until  claimed  by  the  owner  &nd  the  duties 
paid — is  by  law  placed  under  the  control  of  the  Secretary  of  the  Treasury, 
and  that  he  has  full  and  ample  power  to  control  the  selection  not  only 
of  private  warehouses  as  bonded  warehouses,  but  also  of  those  which 
are  designated  for  the  reception  of  unclaimed  goods  discharged  under 
general  order,  and  therefore  commonly  known  as  “  general-order  goods.” 

He  has  also  full  control  over  all  charges  for  .storage  and  labor  and 
other  expenses,  and  it  is  his  duty  to  see  that  such  charges  and  expenses 
do  not,  to  use  the  language  of  the  act,  “  exceed  in  any  case  the  regular 
rates  for  such  objects  at  the  port  in  question.” 

The  regulation  of  this  whole  subject  will,  of  course,  be  effected  by  the 
Secretary  of  the  Treasury  through  the  agency  of  his  official  subordi¬ 
nates,  among  whom  are  the  collectors  of  the  various  ports  of  entry. 
Let  this  fact  be  borne  in  mind  when  we  shall  come  hereafter  to  inquire, 
and,  by  the  light  of  the  testimony  taken,  to  learn  whether  the  “general- 
order”  business  has  been  so  conducted  at  the  port  of  New  York  as  to 
become  a  “  monstrous  abuse”  and  a  “scandalous  system  of  robbery ” 
upon  the  commerce  of  New  York. 

SYSTEM  ORIGINALLY  WELL  ADMINISTERED. 

Secretary  Chase,  in  1801,  issued  an  order  construing  the  legal  period 
within  which  merchants  should  be  allowed  to  make  their  entries  at  the 
custom-house  and  obtain  permits  for  landing  their  merchandise,  to  be 
forty-eight  hours  from  the  arrival  of  the  vessel  at  her  dock.  After  the 
lapse  of  forty-eight  hours,  if  the.merchant  had  not  obtained  his  permit,  the 
merchandise  was  sent  to  “general-order”  warehouses.  At  that  time, 
and  until  1870,  the  Cunard,  Bremen,  and  Hamburg  Steamship  Compa¬ 
nies  had  their  piers  and  warehouses  upon  a  large  and  commodious  scale 
in  Jersey  City  and  Hoboken.  The  warehouses  of  these  companies  had 
been  duly  approved  as  bonded  warehouses  by  the  Secretary  of  the 
Treasury,  and  likewise  designated  for  the  reception  of  unclaimed  goods 
4 discharged  under  general  order.  In  the  city  of  New  York  there  were 
other  bonded  warehouses,  both  on  the  East  and  North  River  sides  of 
the  city  and  in  Brooklyn,  located  at  convenient  points,  and  owned  and 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XL  VII 


leased  by  various  parties,  which  also  were  designated  as  general-order 
warehouses.  In  fact,  the  general-order  business  was  then  distributed 
in  a  manner  most  convenient  for  the  commerce  of  the  port,  and  in  such 
a  way  as  to  produce  a  wholesome  competition  in  the  rates  charged  for 
.  cartage,  storage,  and  labor. 

BEGINNINGS  OF  MALADMINISTRATION. 

In  the  month  of  February,  1870,  Mr.  Grinnell,  then  collector  of  the 
port  of  New  York,  to  which  office  he  had  been  appointed  by  President 
Grant  in  March,  1869,  withdrew  the  general-order  privilege  from  the 
warehouses  on  the  Jersey  side,  and  designated  certain  stores  on  the 
North  River  front  of  the  city  of  New  York  as  general-order  stores.  His 
alleged  reasons,  as  stated  by. himself  in  February,  1871,  before  the 
Joint  Select  Committee  on  Retrenchment,  Senator  Patterson,  chairman, 
(Senate  report  380,  41st  Congress,  3d  sesssion,  pages  150,  151,)  and  by 
other  witnesses  in  the  same  report,  seem  to  have  been  based  upon  an  ob¬ 
jection  to  that  portion  of  the  business  being  in  the  hands  of  u  foreigners.” 
A  similar  objection  to  a  restoration  of  the  general-order  privilege  was  made 
by  Collector  Murphy  on  the  same  ground.  It  was  also  alleged  by  Mr. 
Grinnell  that  there  was  danger  of  smuggling  and  loss  of  revenue  by  that 
and  other  causes  to  the  Government,  by  reason  of  the  warehouses  at 
Jersey  City  being  in  close  proximity  to  the  steamship  docks ;  but  no 
proof  whatever  of  such  losses  has  been  made,  excepting  in  one  or  two 
limited  cases  of  theft,  where  reparation  was  promptly  made  by  the 
steamship  company.  And,  on  the  other  hand,  the  defalcation  and  frauds 
of  Mason  &  Co.,  at  their  general-order  warehouse  in  New  York  City,  in 
September,  1870,  as  described  by  ex- Col  lector  Murphy,  amounted  to  257 
boxes,  bales,  &e.,  which,  according  to  his  account,  were  found  to  have 
been  abstracted  from  the  building,  and  never  have  been  heard  of  since. 
(See  this  Report,  volume  3,  of  testimony,  page  376.)  Mason  &  Co. 
had  no  connection  with  or  interest  in  any  of  the  steamship  lines. 

Mr.  Grinnell  states  that,  when  he  became  collector,  there  were  in  the 
city  of  New  York  six  general-order  stores  besides  those  at  Jersey  City 
aud  Hoboken,  and  although  he  abolished  the  general-order  business  of 
the  last-named  stores,  he  did  not  increase  the  number  in  New  York. 
To  use  his  own  language,  (at  page  150,  Senate  Report  380,  Forty-first 
Congress,  second  session,  1871 :) 

I  did  not  increase  or  decrease.  I  felt  the  necessity  of  stores  being  convenient  to 
the  landing-places.  I  never  gave  Leet  &  Stocking  the  entire  business  on  the  North 
River.  I  divided  it  up.  From  the  Battery  to  a  certain  pier  the  goods  all  went  to  a 
certain  store,  from  that  pier  to  another  pier  they  went  to  another  store  within  that 
range,  and  from  there  on  in  the  same  way ;  so  that  there  was  no  great  distance  to  carry 
goods  from  the  vessel  into  these  general-order  stores. 


INJURY  TO  COMMERCE. 

The  withdrawal  by  Mr.  Grinnell  of  the  general-order  privilege  from 
the  steamship  warehouses  on  the  Jersey  side  was  unfortunate,  and  pro¬ 
ductive  of  great  disadvantage,  inconvenience,  and  loss,  not  only  to  the 
owners  of  those  steamship  lines  and  stores,  but  to  the  mercantile  com¬ 
munity,  who  were  their  customers. 

Commerce  with  Europe  is  now  necessarily  conducted  by  steamships 
almost  entirely,  and  quick  dispatch  is  essential  for  the  profitable  man¬ 
agement  of  such  vessel^.  Delays  in  discharging  or  receiving  cargo  are 
so  much  more  expensive  than  in  the  case  of  sailing-vessels,  that  the 
time  allowed  the  latter  cannot  be  given  in  the  case  of  the  former.  Thus 


XLVIII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


it  was  that  tlie  steamship  companies, 'while  having  general-order  ware¬ 
houses  adjacent  to  their  docks,  were  enabled  to  obtain  a  general  order 
of  discharge  simultaneous  with  the  arrival  of  their  vessels  at  the  dock. 
The  merchandise  was  discharged  en  masse ,  and  went  at  once  into  the 
general-order  warehouse  of  the  company. 

PREVIOUS  FACILITIES  TO  COMMERCE  CUT  OFF. 

But  when  the  importer  presented  his  permit  within  the  forty-eight 
hours  allowed  by  law  or  Treasury  regulation,  he  received  his  goods  with¬ 
out  any  general-order  charges,  as  the  steamship  company  could  better 
afford  to  store  the  goods  free  for  that  period  than  lose  the  time  by  keep¬ 
ing  them  on  the  ship.  Even  where  goods  remained  unclaimed  for 
a  time  longer  than  forty-eight  hours,  the  charges  were  comparatively 
moderate,  and  made  upon  a  scale  satisfactory  to  the  importer.  Even 
since  the  withdrawal  ol  the  general-order  privilege  from  the  warehouses 
of  the  steamship  companies,  it  has  been  their  custom  to  continue  the 
prompt  discharge  of  all  goods  under  general  order,  and  when  the  im¬ 
porter  was  compelled  to  pay  general-order  charges  within  forty-eight 
hours  after  the  ship’s  arrival,  the  steamship  companies  have  re-imbursed 
the  amount  by  deducting  it  from  their  bills  of  freight,  although,  as  Mr. 
Erancklyn,  agent  of  the  Cunard  line,  testified,  these  general-order 
charges  for  forty-eight  hours  at  times  exceeded  the  charges  for  freight 
in  bringing  the  same  goods  across  the  Atlantic.  As  an  instance  of 
these  exactions,  here  is  a  bill  of  Leet  &  Co.  for  general-order  charges, 
storage,  labor,  and  cartage,  (see  this  Beport,  volume  1,  page  207,)  in 
which  it  will  be  observed  that  Leet  &  Co.’s  charges  for  certain  mer¬ 
chandise  were  14  per  cent,  in  excess  of  those  of  Cunard  &  Co.  for 
bringing  the  same  merchandise  across  the  Atlantic: 

January  24'. — The  following  hills  were  sent  to  the  committee  by  Mr.  Horace  B. 
Clarke,  and,  on  motion  of  Mr.  Bayard,  ordered  appended  to  his  testimony  of  the  10th 
instant : 

No.  81.]  New  York,  January  16,  1872. 


Messrs.  Clarke  &  Schultz, 

To  Steamship  Atlantic  (7)  Voyage,  Dr. 

For  freight  and  primage  from  Liverpool,  as  per  bill  of  lading .  £2  15  7 

Exchange,  at  119£  per  cent . . .  $14  78 

<^C&^> 20  barrels  mineral  water. 

Deduct — 

General-order . . . . .  $16  75 

5  dozen  ginger  ale . . .  7  50 


24  25 


New  York,  January  22,  1872. 
To  Geo.  K.  Leet  &  Co.,  Dr. 

United  States  bonded  warehouse ,  371  Washington  and  386  and  388  Greenwich  streets . 
Storage,  labor,  and  cartage  : 

E.  Atlantic. 


20  barrels 


$16  75 


Thus,  the  Cunard  steamship  carried  20  barrels  across  the  Atlantic 
for  $14.78  j  while  Leet  &  Co.,  for  their  charges  in  u  general  order,”  on  the 
same  20  barrels,  exacted  $10.75.  See  testimony  of  Mr.  Schultz,  infra,  p.lv. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XLIX 


LEET  &  STOCKING  IN  THE  “  GENERAL- ORDER  ”  BUSINESS. 

Immediately  before  the  appointment  of  Mr.  Grinnell,  in  March,  1869,  to 
the  collectors!) ip  of  the  port,  Colonel  George  K.  Leet  made  his  first 
appearance  in  New  York,  armed  with  a  letter  from  the  President.  As 
will  be  hereinafter  stated,  he  obtained  at  first  but  a  partial  interest  in 
the  general-order  business,  under  the  cover  of  the  name  of  Mr.  F.  M. 
Bixby.  This  interest  continued  until  the  removal  of  Mr.  Grinnell  in 
the  month  of  July,  1870,  and  the  appointment  of  Mr.  Thomas  Murphy 
in  his  stead,  when,  within  a  few  weeks,  Mr.  Murphy  gave  Mr.  Leet  and 
Mr.  W.  F.  Stocking,  who  by  that  time  had  become  associated  with  Leet 
in  the  business,  the  whole  of  the  general- order  business  on  the  North 
Kiver  side  of  the  city,  which  comprehended,  with  a  very  trifling  excep¬ 
tion,  the  whole  general-order  business  of  the  port  of  New  York. 

Leet  &  Stocking  became  the  lessees  of  two  stores,  one  on  Greenwich 
and  Washington  street,  and  one  corner  of  Leroy  and  West  streets,  the* 
latter  being  carried  on  under  the  firm-name,  of  Leet  &  Stocking,  and  the 
former  under  that  of  George  K.  Leet  &  Co.,  the  same  two  persons 
composing  each  firm.  From  September,  1870,  onward  and  until  after 
the  committee  had  left  New  York,  in  February,  1872,  the  general-order 
business  was  a  monopoly  in  the  hands  of  Leet  &  Stocking,  who  concen¬ 
trated  it  in  the  two  localities  above  stated.  Backed  by  the  official 
sanction  of  the  custom-house,  this  monopoly  became  grossly  exacting 
and  oppressive  to  the  merchants  of  New  York.  Their  charges  for 
storage,  cartage,  and  labor  were  enormously  increased,  and  delay,  incon¬ 
venience,  and  loss  followed  to  the  community. 

As  to  all  this,  we  will  let  the  merchants  of  New  York  speak  for 
themselves. 

ABUSES  OF  THE  “  GENERAL-ORDER  ”  BUSINESS  UNDER  LEET  &  STOCK- 
'  ING. 

Mr.  A.  T.  Stewart  (this  Beport, volume  1,  page  104)  states  as  follows: 

Custom-House,  New  York,  January  6,  1872. 

A.  T.  Stewart  sworn  and  examined. 

By  the  Chairman  : 

Question.  Our  object  is  to  inquire  into  any  abuses  connected  with  the  administra¬ 
tion  of  affairs  in  the  Now  York  custom-house.  One  inquiry  we  wish  to  make  is  partic¬ 
ularly  in  regard  to  the  general-order  business.  We  should  be  glad  if  you  would  give  us 
any  information  respecting  the  workings  of  the  system  as  it  is  now  carried  on. — Answer. 
If  you  will  allow  me  to  read  a  short  statement,  which  I  have  made  out,  it  will  intro¬ 
duce  the  matter  clearly. 

Q.  Certainly. — A.  I  have  prepared  this  statement,  which  this  gentleman  will  read,  if 
you  will  allow  him. 

“  The  removal  of  the  general-order  business  from  the  Cunard  and  Hoboken  stores  has 
not  only  caused  pecuniary  loss,  but  great  inconvenience  to  importers.  The  greatest 
portion  of  merchandise,  if  not  quite  all,  iu  the  dry-goods  line,  as  well  as  other  expen¬ 
sive  descriptions,  are  now  imported  by  steamships,  and  when  they  make  long  passages, 
as  is  usually  the  case  during  the  fall  and  winter  months,  they  discharge  their  cargoes 
immediately  on  arrival,  in  order  to  be  ready  to  sail  again  at  the  appointed  time ; 
when  such  is  the  case,  the  importer  has  not  sufficient  time  to  make  up  his  entry  and 
have  it  passed  at  the  custom-house;  consequently  all  goods  discharged  under  such  cir¬ 
cumstances  are  at  once  sent  to  a  general -order  store. 

“  Soon  after  the  appointmentof  Moses  H.  Grinnell  as  collector  of  this  port,  the  general- 
order  business  was  removed  from  the  Cunard  and  Hoboken. stores.  At  that  time  there 
’was  on  the  west  side  of  the  city  of  New  York  the  same  number  or  more  general-order 
stores  than  now,  but  when  the  business  was  removed  from  the  Cunard  and  Hoboken 
stores,  the  number  in  New  York  was  not  increased  to  correspond  with  the  diminution  of 
storage-room,  and  the  result  has  been  that  storage  accommodation  for  general-order 
goods  has  been  so  restricted  that  when  several  steamers  making  long  passages  arrive 
together,  as  is  frequently  the  case,  their  cargoes  are  crowded  into  the  present  general- 


L 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


order  stores  in  such  a  state  of  confusion  that  great  delay  ensues  in  obtaining  posses¬ 
sion  of  the  goods. 

“  The  number  of  foreign  steamers  arriving  at  New  York  during  the  past  two  years 
has  largely  increased ;  they  are  of  greater  size  and  bring  larger  cargoes  than  a  few 
years  ago  ;  yet  the  storage  capacity  of  the  general-order  stores  has  been  actually  tlim* 
inislied,  to  the  loss  and  delay  of  the  importer, 

“  In  consequence  of  the  general-order  business  being  now  controlled  by  one  firm,  it 
has  become  a  monopoly,  and  tbe  charges  increased  to  $1.50  or  more  on  a  single  pack¬ 
age,  instead  of  about  half  the  rates  as  formerly,  which  difference  is  pure  loss  to  the 
merchant ;  besides,  there  is  an  additional  extra  expense  of  cartage,  say  50  cents  per 
case. 

“  When  the  Cunard  and  Hoboken  bonded  warehouses  had  the  privilege  of  receiving 
goods  under  general  order,  such  as  arrived  by  those  lines  were  discharged  from  the 
ships  direct  to  the  warehouses,  without  any  expense  of  cartage,  and  there  remained  in 
bond,  without  any  additional  charge  for  general  order.  If  an  importer  has  made 
an  entry  for  goods  to  be  deposited  in  above  stores,  and  his  permit  does  not  arrive 
in  time  to  save  all  or  a  part* of  his  shipment  from  general  order,  the  merchandise 
must  be  carted  to  the  general-order  stores  in  New  York,  and  carted  back  again,  making 
§  a  double  expense  of  cartage,  besides  the  storage  and  labor  fees,  of  from  $1.50  upward 
per  package,  even  if  they.remahi  but  a  single  hour  under  general  order. 

“The  general-order  stores  now  in  use  are  in  unsafe  quarters,  surrounded  by  cotton- 
warehouses  and  other  hazardous  buildings,  as  may  be  seen  by  annexed  diagrams, 
rendering  it  difficult  to  procure  insurance,  and  only  at  extra  rates,  while  insurance  is 
easily  effected  on  the  most  favorable  terms  in  the  Cunard  and  Hoboken  stores,  owing 
to  their  safe  and  isolated  position. 

“  The  confusion  consequent  upon  sending  so  many  goods  from  all  parts  of  the  city, 
Jersey  City,  and  Hoboken  to  these  two  stores  only,  which  even  one  or  two  cargoes 
will  produce,  causes  interminable  delays,  resulting  frequently  in  heavy  losses  to  the 
importer  from  fluctuations  in  prices,  without  any  benefit  or  additional  security  to  the 
Government.” 

I  wish  now,  if  you  will  allow  me,  to  place  before  you  an  exhibit  showing  how  these 
general-order  stores  are  placed  and  their  surroundings. 

At  page  105: 

We  have  stated,  in  another  memorandum  which  I  have,  that  the  present  rate  is  $1.50, 
but  the  price  we  have  been  paying  is  $1.75.  I  have  the  bills  here  to  exhibit  to  you. 
An  attempt  was  made  to  charge  us  a  higher  price  at  one  time,  but  we  were  unwilling 
to  pay  it,  and  the  parties  refused  to  deliver  our  goods  unless  we  paid  it.  Those  were 
the  present  parties  who  have  the  general-order  business.  Their  bills  were  made  as 
high,  I  believe,  as  $2.  They  then  made  an  agreement  with  us,  which  I  can  show  you, 
that  we  should  not  be  charged  for  any  goods  more  than  $1.75  a  case. 

*  *  *  *  *  *  * 

At  page  106 : 

By  Mr.  Stewart  : 

Q.  If  tbe  forty-eight  hours  have  not  expired,  the  steamship  eompauy  pays  the  charge. 
If  that  time  has  expired,  do  the  importers  pay  it? — A.  If  the  importer  has  not  made 
his  entry  and  got  his  permit  previous  to  the  forty-eight  hours,  he  has  to  pay  it.  It  is 
his  own  fault  if  he  does  not  have  it  done.  The  forty-eight  hours  are  ample  time  to 
have  an  entry  made.  It  is  a  serious  matter,  no  advantage  to  the  Government,  no  secu¬ 
rity  to  the  Government  whatever,  to  have  the  goods,  as  they  are  now,  carted  to  the 
present  general-order  stores.  On  the  contrary,  we  do  not  leave  any  goods  there  one 
hour  longer  than  we  can  avoid,  from  the  insecurity  of  the  place  and  the  difficulty  of 
getting  insurance,  whereas  at  the  Cunard  and  Hoboken  general-order  stores  we  had  no 
difficulty  in  getting  insurance.  They  being  isolated,  as  it  were,  there  was  less  risk  by 
fire  and  otherwise ;  and  in  all  our  business  with  them,  which  has  beeii  to  the  amount 
of  millions  and  millions  of  dollars,  we  never  lost  one  dollar  either  at  the  Cunard  stores 
or  the  Hoboken  stores. 

******* 

At  page  115 :  • 

By  Mr.  Pratt  : 

Q.  You  have  spoken  of  the  maximum  and  minimum  rates  that  you  have  paid  to  Leet 
&  Company,  $1.75  and  $1.25.  I  ask  you  to  state  to  the  committee  wliat,  iu  your 
opinion,  would  be  the  just  and  fair  rates  for  storage,  cartage,  and  labor  that  Leet  & 
Company  should  charge. — A.  I  believe  about  half  the  price ;  but  I  will  also  add,  if 
you  will  allow  me,  that  with  me,  as  a  merchant,  it  is  not  so  much  the  cost  as  it  is  the 
inconvenience  of  not  getting  my  goods  promptly.  Time  is  more  to  me  frequently  than 
expense.  We  have  had  cases  where,  owing  to  not  getting  our  goods  within  four,  five 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LI 


six,  seven,  or  eight  days,  we  have  lost  ten,  ay,  I  was  going  to  say,  twenty  per  cent,  of 
the  value  of  the  goods,  owing  to  fluctuations  of  the  market. 

Q.  Did  other  importers  suffer  in  the  same  manner  ?— A.  I  presume  they  did.  I  do 
not  suppose  they  have  any  greater  facilities  than  we  have. 

6.  In  the  same  manner,  but.  in  different  degrees,  of  course  ? — A.  Yes,  sir. 

**#*••*** 

We  need  not  say  that  Mr.  Stewart  is  well  known  as  the  largest  im¬ 
porter  of  dry-goods  in  the  United  States,  if  not  in  the  world,  and  as  well 
qualified  to  speak  upon  the  subject  as  any  man  in  New  York,  and  that 
his  statements  carry  with  them  the  great  weight  due  to  his  intelligence 
and  high  personal  character. 

Mr.  A.  K.  P.  Cooper,  who  is  at  the  head  of  Mr.  Stewart’s  custom¬ 
house  staff,  at  page  131,  testifies  as  follows: 

Q.  Do  you  know  anything  of  the  difference  in  the  rates  of  insurance  between  the 
general-order  stores  of  Leet  &  Stocking  and  the  former  general-order  stores  on  the 
Jersey  side  ? — A.  I  do  not  know  of  my  own  knowledge,  but  1  asked  the  person  in 
charge  of  our  insurance  business  what  the  rates  were,  and  he  says  we  are  paying  forty 
cents  per  $100  for  our  bonded  goods  in  the  Jersey  City  stores,  and  that  they  are  asking 
sixty-tive  cents  on  the  $100  for  the  goods  at  Leet  &  Stocking’s  store.  That  was  the 
reply  to  me  of  the  person  who  effects  the  insurance  of  our  establishment.  I  do  not 
know  it  myself. 

Q.  What  clerk  in  your  establishment  is  familiar  with  your  warehouse  business? — A. 
In  what  respect  ? 

Q.  In  respect  to  knowing  what  goods  go  to  the  warehouse,  how  they  are  kept  there, 
and  about  getting  them  outY — A.  I  presume  that  I  know,  in  some  respects. 

Q.  Mr.  Stewart  spoke  of  the  great  inconvenience  and  loss  caused  by  the*  delay  in  get¬ 
ting  such  packages  as  might  be  desired  out  of  the  general-order  store  from  time  to 
time,  to  be  sent  to  the  appraiser’s  store  for  examination.  State  what  you  know  alxmt 
that. — A.  There  are,  for  instance,  in  a  shipment  of  merchandise,  ten  cases  required  to 
be  sent  to  the  public  store  for  examination  by  the  appraisers,  which  have  gone  to  the 
general-order  store.  We  send  to  the  general-order  store  for  those  goods  to  be  delivered, 
and  the  constant  answer  is  that  we  cannot  get  them  from  the  general-order  stores. 
These  goods  go  from  the  general-order  stores  under  the  charge  of  Government  truck¬ 
men  ;  wo  cannot  fransport  them  ourselves.  When  we  send  to  the  general-order  store 
to  inquire  why  such  things  have  not  been  sent,  I  have  been  told,  “  We  cannot  get  them 
out,”  or,  “There  is  a  great  press  of  business.”  I  liave  known  such  instances.  I  have 
known  instances  where  our  goods  have  been  delayed  a  week  or  ten  days,  from  the 
general-order  stores  to  the  public  store,  for  examination,  which  is  a  matter  we  cannot 
control,  because  that  is  done  by  Government  truckmen. 

Q.  State  whether  such  delay  as  that  is  a  source  of  loss  to  merchants. — A.  Sometimes 
it  is  a  very  serious  loss.  I  have  known  instances  where  goods  were  sold  to  arrive  by 
a  certain  steamer,  but  we  could  not  deliver  them  promptly  within  two  or  three  days, 
in  consequence  of  this  delay  at  the  general-order  stores,  and  between  there  and  the 
appraiser’s  store,  and  the  consequence  was  that  the  parties  would  not  receive  the  goods. 
At  certain  seasons  of  the  year  a  week’s  time  makes  a  difference  of  fifteen  or  twenty  per 
cent,  in  the  price  of  certain  classes  of  goods. 

<^.  Did  that  difficulty  exist  with  the  stores  on  the  Jersey  side  to  anything  like  the 
same  extent  ? — A.  No,  sir;  for  the  reason  that  the  general-order  business  of  New  York 
at  that  time  was  divided  up  between  six  or  seven  establishments,  but  now  it  is  all 
crowded  into  two  buildings.  It  was  not  a  monopoly  at  that  time,  because  there  wrere 
in  1806  at  least  seven  general-order  stores  in  New  York,  Jersey  City,  and  Hoboken.  In 
New  York  alone  there  were  three  on  the  w&st  side  and  two  on  the  east  side,  and  then 
there  were  the  stores  iu  Jersey  City  and  Hoboken.  Consequently,  goods  discharged  oil 
the  east  side  went  to  a  bonded  warehouse  in  the  neighborhood  that  was  not  encum¬ 
bered  by  merchandise.  But  now  from  Jersey  City,  Hoboken,  and  all  up  and  down  the 
East  and  North  Rivers,  tile  goods  all  have  to  be  crowded  into  these  two  buildings;  and 
now  it  happens — it  will  happen  within  a  fe\#  days — that  great  confusion  will  occur, 
for  there  are  several  steamers  due  between  now  and  next  Tuesday  which  will  probably 
bring  large  cargoes  of  goods.  I  presume  that  within  the  next  three  days,  if  the  steam¬ 
ers  now  four  and  five  days  over  time  get  in,  we  shall  have  probably  from  eight  hundred 
to  one  "thousand  packages  of  goods  on  board. 

Q.  Consigned  to  your  house  alone? — A.  To  our  house  alone.  Most  of  those  goods 
will  be  sent  immediately  to  the  general-order  store,  because  those  ships  are  behind 
time,  and  they  will  begin  to  discharge  immediately.  That  is  my  anticipation.  You 
can  judge  for  yourselves  that,  when  you  put  the  cargoes  of  three  or  four  ships,  which 
may  exceed  five  thousand  or  six  thousand  packages  in  the  aggregate,  into  two  build¬ 
ings,  no  matter  what  the  facilities  are  for  getting  them  in  aud  out,  there  must  neces- 


LII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


sarily  Ibe  confusion.  They  have  no  time  to  distribute  them  by  marks  and  numbers  so 
as  to  find  them  readily,  but  they  are  put  in  and  they  come  out  in  the  best  way  they 
can.  Sometimes  there  is  great  'delay. 

*  *  #  *  #  *  *  #  *  , 
On  page  133  :  . 

Q.  Even  at  that  rate  what  are  you  paying  as  compared  with  previous  charges  under 
the  system  of  general-order  warehouses  on  the  Jersey  City  side  ? — A.  I  have  already 
explained — at  least  double. 

Q.  Even  with  that  reduction  ? — A.  Yes,  sir.  I  have  a  list  of  general-order  bills  here 
at  different  periods  of  time  to  illustrate  that.  Here  is  a  bill  of  Henry  J.  Meyer,  Sep¬ 
tember  29,  1868,  $1  a  package  ;  one  of  Squire  &  Co.,  dated  January,  1870,  $1.20  a  pack¬ 
age;  one  of  Leet  &  Co.,  dated  December,  1870,  at  $1.25,  $1.50,  and  $1.75 — three  rates; 
and  one  of  the  same  parties  of  August,  1871,  at  $1.75  for  each  package. 

*  *  #  x  #  *  *  x 

Mr.  H.  B.  Clafiin,  another  merchant  of  eminence,  whose  house  im¬ 
ports  goods  to  the  amount  of  eight  to  nine  millions  of  dollars  annually, 
testified  much  to  the  same  effect,  and  sent  the  following  statement, 
(volume  1,  page  576 :) 

“H.  B.  Clafiin  &  Co..  New  York,  Church,  Worth  &  West,  Broadway;  Manchester, 
England,  123  Portland  Stfeet;  Paris,  France,  41  Rue  de  VEchiquier; 

“We  object  to  the  general-order  business  as  at  present  conducted.  First.  Because  of 
the  delay  to  which  we  are  subjected  before  getting  possession  of  our  goods,  this  delay 
occurring  first  at  the  custom-house,  in  the  case  of  duty-paid  goods,  owing  to  the  fact  of 
the  entry  having  to  be  got  up  to  be  compared  with  the  general-order  certificate  issued 
by  the  inspector.  This  requires  at  least  twenty-four  Iioubs,  and  in  case  the  entry  has 
been  mislaid,,  or  if  there  should  be  any  discrepancies  between  the  general-order  certifi¬ 
cate  and  the  entry,  there  is  an  additional  delay  of  a  day  or  so;  and  this  is  an  addition 
to  whatever  time  is  required  to  get  goods  from  the  general-order  stores  after  the  x>roper 
papers  are  presented.  Secondly.  Our  carmen  are  often  delayed  a  long  time  before  get¬ 
ting  an  opportunity  of  backing  up  to  the  delivery  door,  besides  being  obliged  to  ‘  break 
out’  their  own  goods  and  assist  in  loading  them  upon  their  trucks.  In  several  instances 
we  have  sent  porters  from  our  store  to  help  our  carmen  get  out  the  goods.  In  cases 
where  the  sale  of  goods  depends  on  their  delivery  at  a  specified  time,  or  where  freights 
are  unusually  favorable  to  the  purchaser,  the  condition  of  the  sale  hot  unfrequently 
being  such  that,  unless  goods  can  be  shipped  in  time  to  secure  to  th#  buyer  the  benefit 
of  a  temporary  reduction  in  freight,  the  sale  shall  be  considered  canceled,  must  make  it 
appear  evident  to  this  committee  that  any  unreasonable  delay  in  the  delivery  of  the 
goods  is  not  only  a  source  of  great  inconvenience  to  merchants,  but  also  of  serious  loss. 
Third.  Great  damage  is  frequently  sustained  by  goods  from  rough  handling,  while  in 
general-order  stores,  as  has  been  intimated ;  carmen  must  assist  in  getting  out  their  own 
goods,  and  it  therefore  frequently  happens,  carmen  having  free  access  to  all  parts  of  the 
general-order  stores ;  that  goods  are  thrown  .down  from  the  top  of  a  tier,  the.  cases 
broken,  and  sometimes  the  goods  scattered  over  the  floor.  We  have  been  witnesses  of 
such  cases  ourselves.  We  submit  that,  in  a  properly  conducted  warehouse,  things  of 
this  kind  rarely,  if  indeed  ever,  occur,  the  handling  of  the  goods  being  done  entirely  by 
the  warehouse  people.  It  is  very  necessary,  in  storing  certain  kinds  of  carpets,  that 
they  be  placed  so  as  not  to  injure  the  nap.  In  the  general-order  stores  goods  are  fre¬ 
quently  promiscuously  jammed  from  one  end  of  the  store  to  the  other.  Fourth.  Toffhe 
exorbitant  charge  for  all  goods  sent  under  general  order,  our  bills  showing  that  we 
have  paid  from  $1.25  to  $3  per  package. 

“We  have  been  told  by  a  gentleman  of  fourteen  years’  experience  in  the  general- 
order  and  warehouse  business  that  he  would  be  glad  to  take  the  goods  at  one-half  the 
present  rates,  and  would  guarantee  satisfaction  to  the  merchants,  as  far  as  prompt 
deliveries  were  concerned.  We  believe  that  it  is  claimed  that,  under  the  present 
general-order  system,  the  charges  are  not  exorbitant,  and  that  owing  to  the  expense  of 
properly  conducting  the  business  there  is  in  reality  but  very  Jittle  money  in  it.  Under 
such  circumstances,  we  have  sometimes  thought  it  very  strange  that  the  general-order 
business  should  be  held  on  to  so  tenaciously.” 

This  statement  was  presented  by  Mr.  William  Downes,  the  managing 
clerk  of  the  custom-house  business  of  H.  B.  Clafiin  &  Co.,  to  whom  Mr. 
Clafiin  referred  the  committee  as  knowing  most  of  the  matter.'  Mr. 
Downes  went  on  to  state  as  follows,  (page  577 :) 

Witness.  Mr.  Clafiin  also  suggested  that,  if  there  was  anything  in  our  line  that 
would  be  for  the  interest  of  the  merchants  at  large,  to  make  suggestions  to  the  com¬ 
mittee  if  agreeable.  I  can  suggest  as  follows,  at  Mr.  Clalliu’s  request : 

The  Chairman.  Certainly. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LIII 


11  Suggestions.— We  -would  most  respectfully  remedy,  for  fie  present,  grievances  that 
the  general-order  business  he  distributed  among  several  stores,  thus  preventing  the 
over-crowding  of  any  one  store.  We  do  not  see  why  every  steamship  line  should 
not  have  a  general-order  store.  If  a  steamship  company  has  purchased  or  leased  prop¬ 
erty  in  the  vicinity  of  their  docks,  and  at  great  expense  has  erected  thereon  suit¬ 
able  buildings  for  the  storage  of  merchandise,  and  has  given  satisfactory  bonds  to 
the  Government  for  the  safe-keeping  of  such  goods  as  are  confided  to  their  care,  we 
see  no  reason  why  they  should  not  be  allowed  to  store  general-order  goods  from  their 
ships,  in  their  own  stores. 

“  But  if  a  steamship  company  does  not  wish  to  go  to  the  expense  of  building  ware¬ 
houses,  any  first-class  bonded  warehouse  in  the  immediate  vicinity  of  the  company’s 
docks  could  be  designated  by  the  collector  as  a  general-order  store  for  that  particular 
line  only. 

“  We  would  also  suggest  that  the  Collector  confine  all  such  designated  general-order 
stores  to  a  fixed  and  reasonable  scale  of  prices  #or  all  goods  received  under  general 
order,  and  that  he  require  of  all  such  stores  as  prompt  and  satisfactory  management  of 
their  business  as  is  consistent.  We  would  further  respectfully  suggest  that  some 
arrangement  be  made  by  which  the  orders  on  the  general-order  stores,  for  delivery  to 
the  merchant,  or  transfer  to  public  store  of  goods  upon  which  duty  has  been  paid,  could 
be  issued  with  the  sspne  dispatch  as  iu  case  of  goods  to  be  transferred  from  geweral- 
order  stores  to  warehouse,  such  orders  being  issued  immediately  upon  presentation  of 
the  inspector’s  certificate.” 


Witness.  I  will  say  right  here  that  when  the  duty  is  paid  on  packages  it  must  ap¬ 
pear  to  every  one,  and  especially  to  this  committee,  that  we  must  desire  to  get  hold  of 
those  goods  as  soon  as  possible.  We  are  frequently  delayed  in  getting  them. 

“  We  are  of  the  opinion  that  if  the  above-proposed  plans  were  put  into  operation,  the 
objectionable  features  of  the  present  general-order  system,  to  which  allusion  has  been 
made,  would  be  utterly  overcome;  in  fact,  we  believe  the  ‘general-order  business’ 
would  exist  only  in  name. 

“As  it  has  been  shown  in  the  course  of  this  investigation  that  the  custom  has  been 
for  the  steamship  companies  to  pay  the  general-order  charges  on  such  goods  as  were 
permitted  within  the  forty-eight  hours  after  the  ship  enters  at  the  custom-house,  we 
would  also  suggest,  in  the  interest  of  the  merchants,  that  a  correct  record  should  be 
kept  at  the  custom-house  of  the  exact  time  a  vessel  enters.  We  have  known  frequent 
disputes  to  occur  from  the  want  of  such  a  record.  We  had,  at  one  time,  general-order 
bills  amounting  to  several  hundred  dollars  pending  for  some  time,  which  we  were 
finally  obliged  to  pay,  the  steamship  company  claiming  that  the  vessel  entered  at  the 
custom-house  fifteen  minutes  earlier  than  the  time  claimed  by  us.  In  the  absence  of 
any  record  as  to  the  time  the  vessel  really  did  enter,  we  were  obliged  to  suffer  the  loss. 
This  case  was  especially  aggravating  from  the  fact  that  our  custom-house  force  had 
worked  all  night  to  enable  us  to  get  our  permit  aboard  within  the  forty-eight  hours. 
We  speak  of  this  merely  to  show  that  every  effort  had  been  made  on  our  part  to  comply 
with  the  forty-eight-hour  custom. 

“  In  conclusion,  we  beg  to  say  that,  at  the  risk  of  appearing  officious  in  offering  the 
above  suggestions  to  this  honorable  committee,  we  desire  to  be  understood  as  having 
at  heart  the  interests  of  the  community  at  large,  while,  at  the  same  time,  we  have 
endeavored  to  keep  in  view  the  full  protection  of  the  Government. 

“  Very  respectfullv, 

“  H.  B.  CLAFLIN  &  CO. 

.  “  Hon.  Senator  Buckingham, 

“  Chairman  of  Committee  of  Investigation.” 


Mr.  Luther  G.  Tillotson,  an  importing  merchant,  made  the  following 
statement,  (vol.  1,  page  584,)  in  regard  to  a  demand  of  Leet  &  Co.  of 
$130.26,  for  two  or  three  days’  storage  of  a  lot  of  telegraph-wire,  which 
they  detained  until  the  demand  was  paid ;  Mr.  Tillotson  being  so  fortu¬ 
nate  as  to  have  a  personal  friend  at  the  custom-house,  in  Mr.  A.  B. 
Cornell,  through  whose  intervention  the  demand  was  somewhat  reduced: 

By  Mr.  Bayard  : 

Q.  Was  it  reported  to  you  by  your  subordinate  that  such  was  the  case  ? — A.  Yes,  sir, 

Q.  And  when  the  bill  for  $>139.26  was  presented,  and  you  declined  to  pay  it,  they 
retained  enough  wire  until  it  was  paid.  Since  that  time  the  bill  was  modified  by  the 
intervention  of  the  surveyor  and  General  Arthur,  and  you  have  paid  $101.46,  and  you 
suppose  that  if  you  now  send  for  the  wfire  you  can  obtain  it  ? — A.  Yes,  sir. 

Q.  Is  that  the  precise  condition  of  the  case  ? — A.  Yes,  sir. 

Q.  What  is  the  comparison  of  these  charges  with  those  of  other  stores  for  similar 
service  ? — A.  Anticipating  that  inquiry,  I  brought  with  me  a  bill,  which  is  in  amount 


LIV 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


almost  a  duplicate  of  every  other  hill  we  have  had  for  storage  in  a  bonded  warehouse, 
and  in  that  we  are  charged  2%  cents  per  coil  for  storage  and  3  cents  for  labor. 

Q.  What  bonded  warehouse  was  that  ? — A.  B.  B.  Livingston  &  Co.*,  Nos.  508  and  510 
Washington  street. 

Q.  Is  that  a  bonded  warehouse  of  equal  security  ? — A.  I  regard  it  so. 

Q.  Is  it  equal  in  accommodation  and  safety  ? — A.  Yes,  sir. 

Q.  Am  I  to  understand  that,  by  the  original  bill,  the  charge  for  storage  by  Leet  & 
Co.  was  six  times  what  other  bonded  warehouses  charge? — A.  Yes,  sir. 

Q.  And  the  charge  for  labor  Jive  times  what  other  bonded  warehouses  charge  ? — A. 
Yes,  sir.  '  ' 

Q.  And  subsequently,  by  the  intervention  of  the  surveyor  and  collector,  the  bill  was 
reduced,  so  that  the  charges  of  the  general-order  warehouse  were  only  four  times  as 
much  for  storage,  and  a  little  more  than  three  times  as  much  for  labor? — A.  Yes,  sir.  I 
may  remark,  in  that  connection,  however,  that  Mr.  Cornell  said  to  me  that  if  he  had 
known  that  Mr.  Leet’s  representative  said  that  I  had  no  remedy — that  I  could  not  help 
myself — he  would-  have  made  him  reduce  the  bill  still  more  ;  but  he  supposed  it  was  a 
matter  of  principle  with  me  rather  than  the  amount  involved,  which,  of  course,  was 
the  case. 

*■###***#* 

On  page  585 :  # 

Q.  You  say  that  this  wire  lay  upon  the  pier  three  days? — A.  About  three  days. 

Q.  How  came  it  to  lie  upon  the  pier  three  days,  when  we  are  given  to  understand  that 
forty-eight  hours  is  the  time  during  which  goods  are  retained? — A.  I  did  not  under¬ 
stand  that  they  are  allowed  to  remain  on  the  pier  forty-eight  hours;  we  never  have 
been  so  much  indulged  as  that.  I  understand  that  forty-eight  hours  is  the  time  after 
the  arrival  of  the  ship  before  the  authorities  can  place  the  goods  under  general  orders 
at  the  expense  of  the  importer. 

Q.  But  this  was  more  than  forty-eight  hours  ? — A.  In  answer  to  your  question,  our 
invoice  of  this  wire,  for  some  reason,  was  delayed,  and  not  mailed  in  time  to  reach  us 
with  the  wire.  Feeling  confident  that  it  would  reach  us  by  the  next  steamer,  which 
was  due  within  two  or  three  days,  I  sent  my  book-keeper  to  the  pier  to  arrange,  if  he 
could,  to  have  the  wire  kept  from  general  order.  The  inspector  asked  my  book-keeper 
what  it  would  be  worth  to  us,  and  in  some  way,  which  I  do  not  exactly  know,  the 
amount  agreed  upon  was  $25,  to  be  paid  to  the  inspector.  My  book-keeper  presented 
his  report,  and  I  acceded  to  the  agreement,  because  I  knew  it  would  cost  us  consider¬ 
ably  more  than  to  go  under  general  order.  He  said  to  the  book-keeper,  as  the  latter 
reported  to  me,  that  he  would  keep  the  wire  just  as  long  as  we  wanted  it.  The  steamer 
with  the  invoice  arrived  within  two  or, three  days  after,  and  on  the  morning  of  its 
arrival,  we  having  received  the  invoice,  got  our  permit  in  the  afternoon,  and  we  were 
surprised  to  find  that  the  wire  had  gone  under  general  order  that  morning,  notwith¬ 
standing  our  agreement  with  the  inspector. 

*  *  #  *  *  #  » 

Mr.  Benjamin  H.  Hutton,  of  the  firm  of  Benkart  &  Hutton,  importers 
of  foreign  goods,  testifies  as  follows,  volume  2,  page  67 : 

By  the  Chairman  : 

Q.  Is  there  anything  connected  with  the  custom-house  which  you  could  properly 
call  an  abuse,  coming  within  your  knowledge  or  experience  ? — A.  There  is  one  subject^ 
in  particular  which  I  regard  as  a  very  serious  abuse. 

Q.  What  is  that  ? — A.  That  is  the  general-order  system  and  the  charges  made 
under  it. 

Q.  What  are  they  for  ? — A.  For  storage,  cartage,  and  labor. 

Q.  Are  they  more  than  the  charges  of  other  parties  for  similar  services  ? — A.  They 
are  considerably  higher. 

Q.  How  much,  should  you  think  ? — A.  From  twice  to  three  times  more. 

Q.  Have  you  made  a  complaint  to  the  keepers  of  the  general-order  stores? — A.  Yes, 
sir  ;  upon  various  occasions. 

Q.  Have  your  grievances  been  redressed  in  any  particular  ? — A.  No,  sir. 

Q.  You  are  able  to  get  no  deduction  from  what  you  call  extravagant  rates? — A.  No, 
sir. 

Q.  How  do  the  charges  compare  with  those  of  former  years  ? — A.  I  think  they  are 
about  six  times  as  much,  and  have  been  ten  times. 

Q.  That  is,  the  charges  for  labor,  storage,  &c.  ? — A.  They  are  50  cents  for*storage,  50 
cents  for  labor,  and  from  50  to  75  cents  to  $1  per  package  for  cartage. 

Q.  That  is  the  general  rule,  so  far  as  you  know,  for  general-order  charges  ? — A.  In 
my  experience. 

*  if  #  #  4  #  #  # 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LV 


'Ey  Mr.  Pjrat't  : 

Q.  You  think  eight  or  ten  years  ago  you  paid  for  cartage,  storage,  and  labor,  all 
together,  not  more  than  50  cents  a  package  ? — A.  That  is  my" impression. 

Q.  When  did  the  increase  commence  in  the  charges  ?— A.  I  think  they  began  to 
increase  in  1861  and  1862.  • 

Q.  Was  the  increase  gradual  or  pretty  abrupt? — A.  At  that  period,  or  later,- in  1863, 
and  prior  to  Mr.  Draper— I  think  it  was  Mr.  Barney  who  was  the  collector — the  amounts, 

Q.  About  what  percentage  below  the  charges  of  1863  and  1864  are  the  bills  you  com¬ 
plain  of  now  ? — A.  I  do  not  know  that  there  is  any  reduction  excepting  during  a  por¬ 
tion  in  the  year.  I  am  not  very  sure  of  it.  I  should  have  to  refer  back  to  declare  it, 

Q.  I  understand  you  to  say  that  the  maximum  change  occurred  in  1863  and  1864. 
and  that  you  sometimes  paid  as  high  as  $2  and  $2.50  a  package  ? — A.  Yes,  sir.  It.was 
a  matter  of  caprice  at  that  time  until  it  was  arrested.  I  think  Mr.  Barney  made  an 
attempt  to  arrest  it,  and  Mr.  Draper,  his  successor,  did  likewise.  I  know  the  charge 
was  reduced  under  Mr.  Draper,  and  under  Leet  &  Stocking  it  was  increased.  It  was 
about  $1.20  and  $1.25,  but  when  these  present  store-keepers  took  hold  of  it  they  began 
charging  $1.75.  On  remonstrances  they  would  put  it  down  to  $1.50,  and  then  it  would 
go  up  again  to  $2.  It  appeared  to  be  a  mere  matter  of  caprice  more  than  anything 
else. 

By  Mr.  Casserly  : 

Q.  Was  it  in  1863  or  1864  that  gold  was  the  highest  ? — A.  It  was  in  1864  that  it  was 
the  highest. 

Q.  It  was  very  high  in  1863? — A.  Yes,  sir. 

*  *  *  #  ■¥  #  *•  *  * 

Q.  Do  you  know  of  any  increased  security  to  the  Government  to  be  attained  under 
the  present  system  that  would  not  be  equally  well  attained  if  the  steamship  lines  were 
permitted  to  have  bonded  warehouses  adjacent  to  their  points  of  landing,  and  which 
should  be  designated  as  general-order  warehouses,  and  where  the  goods  so  imported 
and  not  claimed  in  forty-eight  hours  should  be  sent  ? — A.  I  think  that  system  would  be 
far  superior  to  the  present  system. 

Q.  As  a  merchant  you  have  been  led  to  consider  this  thing? — A.  Yes,  sir. 

Q.  Do  you  know  of  any  objection,  based  upon  the  point  of  security  to  the  Govern¬ 
ment  or  convenience  to  the  custom-house  or  to  those  engaged  in  commence,  which 
would  make  the  present  system,  such  as  it  is,  as  conducted  under  Leet  &  Co.,  prefer¬ 
able  to  the  system  I  have  suggested? — A.  I  think  that  which  exists  now  is  the  worst 
possible  system.  I  think  the  Government  ought  to  have  its  own  public  warehouses 
under  Government  management  entirely,  and  not  make  this  privilege  a  reward  for  any 
political  service  or  any  other  service.  I  think,  then,  the  business  could  be  conducted 
with  more  fairness,  and  certainly  without  extortion.  As  it  is  at  present,  we  are  sub¬ 
ject  to  the  caprices  of  the  store-keeper  in  making  his  charges.  *  , 

*»-#*#*** 

Q.  Your  house  is  Benkart  &  Hutton  ? — A.  Yes,  sir. 

Q.  It  is,  I  believe,  not  only  one  of  the  oldest,  but  one  of  the  principal  houses  in  its 
line  in  this  city? — A.  I  believe  it  is  about  as  old  as  any  house  here  now.  It  is  much 
reduced  under  the  operations  of  the  high  tariff. 

Q.  Still  your  business  is  quite  a  large  one? — A.  Comparatively  so. 

Q.  In  testifying  hero,  do  you  speak  from  the  results  of  your  experience  since  1824? — 
A.  Eighteen  hundred  and  thirty-four.  If  I  go  back  to  those  fen  years,  I  ought  to  state 
what  we  paitf  then  for  a  case  that  went  into  the  public  stores.  It  was  sometimes  12^ 
cents,  and  sometimes  18f  for  cartage.  No  storage  was  ever  charged  then ;  it  was 
cartage. 

Q.  That  was  as  far  back  as  1824  ? — A.  From  1824  to  1830. 

Q.  Do  you  consider  that  the  present  customs  system  at  this  port  is  an  economical 
one  ?— A.  In  reference  to  the  general  conduct  of  the  business  ? 

Q.  As  respects  the  general  effect  of  the  system  in  the  charges  which  it  imposes  upon 
commerce  and  the  consumers?— A.  I  think  it  is  very  extravagant. 


C.  W.  H.  Schultz  testifies  as  follows,  (page  1G0 :), 

Q.  Do  you  have  many  packages  go  into  general-order  store  ? — A.  We  only  lqive  pack¬ 
ages  go  into  §eneral  order  when  we  do  not  get  the  consul’s  certificate  and  bills  of  lad¬ 
ing  in  time. 

Q.  I  understand  what  the  law  is  on  the  subject,  but  my  question  is,  do  you  have 
many? — A.  It  has  sometimes  happened.  We  have  had  some;  we  have  had  several 
cases  of  that  kind. 

Q.  Are  you  able  to  state  what  the  charges  are  that  you  have  been  in  the  habit  of 
paying  to  the  keepers  of  the  general-order  stores  for  cartage  and  labor  for  storage? — 
A.  That  depends  on  the  size  of  the  packages. 


1 

LVI  NEW  YORK  CUSTON-HOUSE  INVESTIGATION. 

Q.  Yes;  size  and  weight,  I  suppose.— A.  Yes,  sir.  In  one  instance,  for  example,  in 
the  case  of  four  hnndred  cases  of  Duncan  &  Co.’s  goods,  of  Belfast,  they  wanted  to 
charge  five  cents  each  for  receiving  and  five  cents  each  for  delivery  and  five  cents  each* 
for  cartage,  the  usual  charge  being  two  cents  each. 

Q.  The  usual  charge,  you  mean,  at  private  warehouses  or  bonded  warehouses? — A. 
Bonded  warehouses  and  private  warehouses  being  both  two  cents  each.  It  was  about 
150  per  oent.  more.  That  is  generally  the  case  in  every  other  instance.  We  once  had 
a  case  of  twenty  casks  of  ginger-ale  which  went  under  general  order,  and  wheu  the 
amount  that  we  had  to  pay  for  general-order  expenses  swallowed  up  the  entire  freight 
of  the  goods  ;  and  besides  that,  one  of  the  casks  was  half  or  nearly  emptied  of  its  con¬ 
tents  while  it  was  under  general  order,  and  we  made  the  company  pay  that  as  well ; 
and  instead  of  receiving  any  freight,  they  had  to  re-imburse  us  about  seven  or  eight 
dollars. 

#  *  *  *  *  *  # 


Mr.  B.  F.  Mudgett,  formerly  deputy  collector  of  New  York — from  1862 
to  1867 — testifies  as  follows,  volume  1,  page  457  : 

By  Mr.  Bayard  : 

Q.  You  then  consider  that  the  general-order  charges  are  superadded,  and  unnecessary 
for  the  security  of  the  Government? — A.  Yes,  sir;  I  think  so.  Iam  almost  positive.* 
There  is  no  question  about  it,  and  can’t  be. 

Q.  You  have  had  an  interest  in  the  labor-contracts? — A.  Yes,  sir;.  I  had  the  labor- 
contract  at  the  United  States  public  store. 

Q.  Have  you  examined  the  subject  of  cartage? — A.  Yes,  sir. 

Q.  You  have  been  led  to  study  and  examine  that  ? — A.  Yes,  sir  ;  I  know  what  that  is. 

Q.  We  have  had  it,  in  testimony  here  from  sundry  responsible  parties,  among  whom 
is  A.  T.  Stewart,  and  who  has  an  agreement  and  contract  with  Leet  &  Co.,  that 
he  wasn’t  to  be  charged  over  $1.75  for  any«ase,  nor  less  than  $1.25  for  any  case, 
and  that  the  average  of  his  payments  to  them  is  nearer  $1.75  than  it  is  to  $1.25,  over  a 
dollar  and  a  half.  At  that  rate,  what  profit  would  there  be,  that  being  the  charge  for 
storage,  cartage,  and  labor ;  what  would  be  the  profit,  at  such  a  rate  as  that?  I  ask 
you  that,  as  an  expert,  from  your  experience  of  labor,  and  your  knowledge  of  the  busi¬ 
ness  of  cartage. — A.  Well,  it  would  be  more  than  $1  on  a  package.  The  profit  would 
be - 

Q.  That  would  be  a  profit  of  66-f  per  cent.  ? — A.  More  than  100  per  cent. 

Q.  That  is  to  say,  that  you  think  you  could  have,  as  an  actual  fact,  the  average  of 
these  parcels  carted  and  stored  for  an  average  of  fifty  cencs  or  less  ? — A.  Yes,  sir. 

Q.  I  am  speaking  of  the  actual  cost. — A.  The  actual  cost  wouldn’t  be  much  over 
that.  It  might  be  a  little  over  that.  You  can  get  them  carted  for  30  cents,  and  20 
cents  would  cover  all  other  costs. 

Mr.  George  D.  Gale,  volume  2,  page  125 : 

By  Mr.  Casserly  : 

Q.  What  is  your  business  ? — A.  Imported  of  dry-goods,  satins,  cloths,  and  ribbons. 

Q.  What  is  your  house? — A.  A.  De  Graaff  &  Co. 

Q.  Are  you  acquainted  with  the  general-order  system  as  it  now  exists  and  has 
existed  for  the  last  twelve  or  fifteen  months? — A.  Yes;  I  have  had  some  experience 
in  it. 

Q.  In  what  light  do  you  regard  its  workings  ;  are  they  beneficial  to  commerce  and 
the  mercantile  community  and  to  the  consumer,  or  otherwise  ? — A.  I  don’t  like  the 
way,  for  my  part,  they  are  fixed  now.  They  are  not  as  good  as  they  used  to  be.  I 
prefer  the  old  regime  better  than  the  present,  very  much  better. 

Q.  What  experience  have  you  had  in  general-order  systems  at  this  port ;  how  long  an 
experience  have  you  had  in  general-order  systems — the  different  general-order  systems 
in  New  York  ? — A.  I  have  had  for  some  years.  For  some  six  or  seven  years  I  have 
given  my  particular  attention  to  it. 

Q.  And  you  consider  the  present  general-order  system  does  not  compare  favorably 
with  those  which  preceded  ? — A.  I  like  the  old  system  very  much  better. 

Q.  How  do  the  rates  under  the  present  system  compare  withthe  rates  Tinder  the  old 
system  ? — A.  They  are  very  much  higher. 

Q.  State  how  much  higher: — A.  Our  goods  most  generally  come  by  the  Hamburg 
and  Bremen  line,  and  frequently  by  the  Cunard  and  Mr.  Dale’s  and  Mr.  Hurst’s  line. 
We  have  had  our  goods  from  the  Hoboken  stores,  aud  we  never  paid  more  than  $1  for 
large  packages,  and  75  cents  for  smaller  ones.  Iu  case  they  went  under  general  order 
subsequently  to  that,  we  paid  from  $1.50  to  $2.50. 

Q.  Per  package  ? — A.  Yes. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LVII 


William  Buchanan  testifies,  volume  2,  page  116 : 

By  Mr.  Bayard  : 

Q.  Where  is  your  place  of  business  ? — A.  No.  54  Broad  street. 

Q.  What  is  your  occupation  f — A.  I  have  two  businesses :  a  manufacturer  of  tobacco, 
and  I  have  also  got  an  interest  in  a  spinning-mill. 

Q.  Are  you  an  importer  of  goods  from  Europe  ? — A.  No,  sir.  I  imported  spinning- 
machinery,  though. 

Q.  Have  you,  in  the  course  of  your  importation  of  machinery,  had  any  business  with 
the  general-order  stores  kept  by  Leet  &  Co*.  ? — A.  I  had,  sir. 

Q.  State  to  the  committee  what  your  experience  has  been. — A.  Part  of  my  machinery 
got  hurried  in  there  very  rapidly,  and  I  discovered  it,  stopped  it,  spoke  to  them  about 
they  had  hurried  matters,  and  got  their  bill,  got  it  reduced  as  much  as  I  could,  and 
then  complained  about  it  to  the  custom-house.  It  was  called  a  righteous  bill,  and  I 
paid  it.  I  have  got  the  bill  with  me. 

Q.  Let  me  see  it. 

[The  witness  produced  the  bill,  which  was  read,  as  follows : 

“New  York,  June  12, 1871. 

“M - 

“  To  Leet  &  Co.,  Dr. 

“  United  States  bonded  warehouse,  362,  363,  364  West  street,  and  157,  159,  161,  163,  and  167 

Leroy  street. 

'  “  STORAGE,  LABOR,  AND  CARTAGE. 

^N^Y^  7  cases  machinery : 

Storage,  at  $2 .  $14  00 

Labor,  at  $2 . - .  14  00 

Cartage,  at  $2 .  14  00 

1  case  machinery . . .  1  25 

12  cases  machinery: 

Storage,  at  $3 .  36  00 

Labor,  at  $3 . 36  00 

Cartage,  at  $3 . ! .  36  00 

3  cases : 

Storage,  at  $2 . 6  00 

Labor,  at  $2 . 6  00 

*  Cartage,  at  $3 .  9  00 

3  cases  : 

Storage,  at  $3 . 9  00 

Labor,  at  $3 .  9  00 

Cartage,  at  $4 .  12  00 

1  case: 

Storage .  5  00 

Labor .  5  00 

Cartage .  6  00 

1  case  : 

Storage .  3  00 

Labor .  3  00 

Cartage . 5  '00 

2  cases : 

•  Storage,  at  $4 .  8  00 

Labor,  at  $4 . 8  00 

Cartage, at  $4 . 8  00 

253  25 

*  : - rr^~= 

(“Ex.  England.) 

“I  find,  on  examination,  that  this  bill  is  reasonable. 

“  S.  P.  R. 

“  Received  payment. 

“  LEET  &  CO., 


LYIII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Q.  I  observe  this  bill  is  dated  the  12th  of  June,  1871. — A.  Yes,  sir. 

Q.  Now  this  bill  amounts  to  $253.25.  When  .were  these  goods  landed  ? — A.  They 
were  landed  on  Saturday,  the  10th  of  June,  sir. 

Q.  By  what  ship  ? — A.  The  England. 

Q.  When  did  they  go  into  general  order  ? — A.  On  Saturday. 

Q.  On  the  same  day  they  were  landed  ? — A.  Yes,  sir.  They  were  put  from  the  hold 
of  the  ship  in  the  slings  right  info  the  carts ;  they  did  not  land  on  the  dock  at  all. 

On  pages  118  and  119,  it  appears  this  machinery  never  went  into  the 
stores  of  Leet  &  Co.  at  all,  but  was  suffered  to  remain  out,  uncovered, 
in  the  rain,  by  which  it  was  much  injured. 

Edward  C.  Johnson,  one  of  the  most  experienced  warehousemen  in 
New  York  City,  testifies,  volume  2,  page  372  : 

Q.  What  is  the  chief  profit  in  general  order  ? — A.  They  make  money  on  the  cartage; 
they  make  money  on  the  labor  ;  they  make  50  per  cent.,  certainly ;  at  Leet  &  Stocking’s 
prices  it  is  more  than  50  per  cent,  on  the  labor.  When  they  cart  in  a  load — they  allow 
them  so  much  for  a  load — they  take  in  the  weight  of  a  load  and  pay  them  for  so  many 
packages  riding  at  that  weight  on  a  cart,  and  when  it  goes  out  it  has  always  been  the 
custom  with  bonded  warehouses,  unless  it  is  their  own  customers,  to  charge  cartage  on 
every  load  at  the  rate  of  50  cents. 

Q.  Do  you  mean  every  load  or  every  package? — A.  Every  package.  If  a  man  rides 
fifty  packages  on  a  load  they  might  pay  the  carman  $5,  and  they  might  charge  $25,  be¬ 
cause  they  would  get  cartage  on  every  package. 

Q.  I  understand  you,  then,  that  there  is  a  large  profit  on  cartage  and  there  is  profit 
on  labor.  I  want  to  know  in  the  matter  of  storage.  You  say  that  under  the  general- 
order  system  a  man  can  make  six  times  the  storage  ? — A.  In  one  month  generally. 

Q.  That  would  be  as  if  a  year  had  seventy-two  months  ? — A.  Yes,  sir. 

Q.  He  could  make  that  much  out  of  the  twelve  months  ? — A.  I  want  to  explain  that 
there  are  some  months  that  there  is  not  so  much  arrives  as  others,  and  it  might  not  amount 
to  that.  Some  months  it  is  dull,  but  ordinarily  enough  comes  in.  Then,  a  gain,  there  is  a 
great  rush.  Here  is  a  couple  of  bills  that  I  paid  Leet  &  Co.,  if  you  will  allow  me  to 
present  them,  as  you  understand  a  great  deal  better  by  reference  to  them.  Here  are 
two  bills,  each  for  five  cases,  both  cases  being  of  about  the  same  size  aud  weight.  One 
of  them  is  made  out  at  $6.25.  I  took  the  i*ates  from  there  prescribed  by  the  chamber  of 
commerce  and  added  60  per  cent.,  and  all  I  could  ever  get  out  of  them  was  about  $4.50. 

Q.  You  say  $6.25  was  the  rate  charged  ? — A.  That  was  the  rate  I  paid. 

Q.  And  taking  the  chamber  of  commerce  rate  and  adding  60  per  cent,  would  be  how 
much?— A.  Four  dollars  and  fifty  cents.  That  is  what  Mr.  Draper  said  was  the  rate  to 
be  added  to  the  chamber  of  commerce  rates. 

Q.  That  was  during  the  high  price  of  gold? — A.  No,  sir  ;  it  was  only  a  few  days  ago. 

Q.  I  mean  the  60*per  cent.? — A.  Yes,  sir. 

Q.  The  reason  for  that  does  not  exist  now  ? — A.  I  don’t  think  it  does. 

Q.  The  other  bill  is  for  the  same  number  of  cases  of  the  kame  size  and  weight? — A. 
Yes,  sir  ;  it  is  $7.50.  That  would  be  $4.50  with  the  60  per  cent,  added  to  the  chamber 
of  commerce  rates. 

Q.  How  many  cases  are  there? — A.  Five  cases.  • 

Q.  And  $7.50  in  one  bill  when  the  amount  of  the  charges  under  Mr.,  Draper’s  rates — 
when  there  was  a  depreciation  of  paper  money — would  be  only  $4.50  ? — A.  Yes,  sir. 

Q.  That  is  just  $3  more  than  what  would  be  allowable  under  Mr.  Draper’s  rates  ? — 
A.  Yes,  sir;  $3. 

Q.  And  75  per  cent,  more  was  charged  than  should  be  ? — A.  Yes,  sir. 

Q.  What  are  the  dates  of  these  bills  ? — A.  One  is  October  17, 1871,  and  the  other  Sep¬ 
tember  15,  or  18,  1871 — both  last  fall. 

■Q.  You  say  that  the  expense  of  carrying  goods  to  one  store  is  naturally  no  more  than 
carrying  to  another  ? — A.  Not  a  bit. 

To  this  we  might  add  the  testimony  of  Messrs.  Bixby,  Prentice,  Neu- 
stadt,  Bisnell,  Bloomfield,  and  many  others,  all  showing  the  same  rates  of 
overcharge  and  extortion. 

THE  CASE  AS  PROVED  IN  1871. 

The  testimony  given  before  the  joint  select  committee,  Mr.  Patterson 
chairman,  in  1871,  was  equally  emphatic  as  to  the  u  monstrous  abuse” 
of  the  general-order  system  as  administered  by  Leet  &  Stocking. 

A  few  extracts  from  the’  testimony  of  the  more  prominent  witnesses 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LIX 


will  be  added  here,  from  the  report,  (Senate,  380,  Forty-first  Congress, 
third  session.) 

William  E.  Dodge,  of  Phelps,  Dodge  &  Co.,  one  of  the  great  commer¬ 
cial  houses  of  the  world,  says,  page  45 : 

Question.  What  is  your  business? — Answer.  I  have  been  connected  with  the  import¬ 
ing  business  in  New  York  over  forty  years,  doing  business  constantly  with  the  New 
York  custom-house. 

Q.  You  are  familiar  with  the  workings  of  the  old  general-order  system  and  the 
new? — A.  Yes,  sir. 

Being  asked  to  give  his  views  of  the  workings  of  the  new  system,  he 
says : 

If  the  vessel  arrives  at  the  dock  late  in  the  day,  it  is  impossible  for  a  merchant  to 
secure  a  permit  for  his  goods  until  11  o’clock  the  next  day.  The  goods,  as  soon  as 
landed,  are  immediately  carted  (to  favorite  stores,  I  was  going  to  say,  but  won’t)  to 
stores  under  the  general-order  system  on  the  New  York  side,  and  subjected  to  expenses, 
as  a  general  thing,  double  what  they  would  be  if  there  was  a  warehouse  on  the  other 
side,  where  the  goods  might  lie  for  twenty-four  or  forty-eight  houfs,  under  the  charge 
of  the  revenue  department,  before  they  were  sent  away,  giving  merchants  time  to  get 
their  permits.  No  matter  whether  they  are  permitted  or  not,  they  are  sent  over  here. 
This  process  makes  the  port  of  New  York,  in  my  opinion,  the  most  expensive  port  for 
the  transaction  of  business  in  the  world.  I  have  no  hesitation  in  saying  that — in  the 
world. 

*  #  *  *  #  *■  * 

Q  •  I  want  to  know  if,  under  the  present  system,  it  is  more  expensive  to  the  importers 
than  under  the  old? — A.  I  should  think  it  was  50  per  cent,  more,  besides  the  everlast¬ 
ing  trouble.  You  go  there  and  find  a  part  of  the  goods  there,  a  part  yonder  that  you 
have  to  go  after,  and  there  you  are  running  about 

****#*#*■# 

Q.  Is  what  you  say  true  of  all  importers;  are  all  importers  subjected  to  greater  ex¬ 
pense  under  this  system  than  under  the  old  ;  or  does  it  apply  simply  to  the  large  im¬ 
porters  receiving  goods  at  the  Jersey  City  and  Hoboken  ferries? — A.  Under  the  old 
system,  if  a  man  had  six  cases  and  was  prompt  to  get  out  his  permit,  he  would  have  no 
expense,  except  cartage  and  ferriage,  not  to  exceed  thirty  cents  a  case.  Now,  it  would 
cost  him  at  least  $1.50  for  each  one  of  the  cases. 

W.  E.  Dodge,  jr.,  of  tbe  same  house,  had  previously  testified  to  the 
same  effect,  and  that  the  increased  expense  was  sufficient  to  eat  up  the 
profits  on  certain  classes  of  merchandise  (See  pages  37,  38.) 

S.  B.  Chittenden  (at  pages  43,  44)  testifies  that,  under  Leet  &  Co.,  the 
expenses  in  general  order  “  were  from  $1.G0  to  $1.70  on  a  case,  where 
they  used  to  be  about  $1.” 

Thomas  C.  Patou,  (pages  115, 11G,  &c.,)  an  importer  for  sixteen  years, 
testifies  that  packages  which  used  to  cost  70  cents  in  general  order  are 
made  to  cost  $1.75,  besides  the  cartage  across  from  Jersey  City. 

Emil  Magnus,  (pages  117,  118,)  custom-house  broker  for  fifteen  years, 
testifies  that  where  cases  used  to  cost  70  cents  in  general  order,  “  now 
the  charges  average  $2.”  He  adds :  “  I  have  bills  by  the  hundred,  and 
you  can  see  them  if  you  wish.” 

John  D.  C.  Gillespie,  his  partner,  speaks  of  “the  exorbitant  charges” 
under  the  new  system,  and  says  that  they  are  “probably  twice  as  much 
as  formerly,”  averaging  $2  a  case,  where  they  used  to  be  but  75  cents. 

Edwin  Ferguson,  (pages  127,  128,)  custom-house  broker,  testifies  that 
the  general-order  charges  were  from  100  to  150  per  cent,  higher  under 
Leet  &  Co.  than  under  the  old  system. 

Francis  M.  Bixby,  warehouseman,  also  in  the  general-order  business 
for  ten  or  eleven  years,  testifies  (pages  21,  24)  of  Leet  &  Co.’s  charges 
in  general  order:  “I  think  the  prices  are  more  extortionate  now  than  I 
have  ever  known  them.” 

Yet  he  had  been  in  the  business  all  through  the  highest  prices  of  the 
war — in  18G3  and  18G4. 

S.  Rep.  227 - yi 


LX 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Messrs.  A.  T.  Stewart  and  B.  H.  Hutton  testified  also,  in  1871,  sub¬ 
stantially  as  they  did  in  1872  before  the  Senate  committee. 

They  and  all  the  other  witnesses  in  1871,  above  quoted,  agree  as  to 
the  oppressive  charges  of  Leet  &  Co.  They  also  agree  that  by  taking 
away  the  general  order  from  the  Jersey  side  there  was  no  increase  of 
security,  but  the  contrary. 

It  is  difficult  to  do  justice  to  the  astonishing  fact  that,  notwithstand¬ 
ing  this  body  of  proof  before  the  joint  committee  of  last  year,  the  same 
abuses  were  found  still  in  existence  by  the  Senate  committee  of  this 
year,  not  at  all  shaken,  but  more  flourishing  than  ever — apparently 
made  bolder  and  stronger  by  the  public  exposure  of  last  year. 


REMONSTRANCE  OF  THE  MERCHANTS  OF  NEW  YORK. 


It  is  worth  while  hereto  insert  a  petition  to  Collector  Murphy,  signed 
by  one  hundred  of  the  leading  importing  firms  in  New  Y  ork  City : 

New  York  City,  October'  20, 1870. 

To  the  Honorable  Thomas  Murphy,  Collector  of  Customs  at  the  Port  of  New  Yorlc : 

The  undersigned,  merchants  of  this  city,  hereby  desire  to  represent  to  the  honor¬ 
able  collector,  that  several  months  since,  on  their  petition,  presented  to  the  Govern¬ 
ment  authorities  through  the  courtesy  of  the  Hon.  M.  H.  Grinnell,  then  collector,  a 
thorough  investigation  was  instituted  by  officers  of  the  United  States  Treasury  De¬ 
partment  into  all  the  circumstances  and  facts  bearing  upon  the  question  of  the  con¬ 
tinuance  of  the  general-order  business  at  the  bonded  warehouses  on  the  New  Jersey 
shore,  at  the  piers  of  the  Cunard,  Bremen,  and  Hamburg  lines  of  steamships. 

The  undersigned  having  then  expressed  a  preference  for  the  continua  nee  of  that 
business  at  the  piers  mentioned,  and  having  taken  great  pains  to  present  to  the  hon¬ 
orable  Secretary  of  the  Treasury,  and  to  the  late  collector,  their  reasons  for  such  pref¬ 
erence,  were  gratified  when  apprised  by  the  official  letters  of  the  honorable  Secretary, 
under  dates  of  June  1st  and  9th  last,  (copies  of  which  are  annexed,)  that  the  request 
made  in  the  interest  of  commerce  was  not  inconsistent  with  security  to  the  Govern¬ 
ment. 

Since  thje  honorable  Secretary  has  advised  compliance  with  it,  we  now  most  re¬ 
spectfully  renew  our  request,  and  rely  upon  an  immediate  restoration  to  the  commerce 
of  this  port  of  this  essential  feature  of  convenience  and  economy. 


Phelps,  Dodge  &  Co., 

Patou  &  Co., 

S.  B.  Chittenden  &  Co., 
Eldridge,  Dunham  &  Co., 
Rosenfeldt,  Bros.  &  Co., 

Thos.  Drew  &  Co., 

John  M.  Davies  &  Co., 

Arnold,  Constable  &  Co., 

W.  &  J.  Sloan e, 

B.  L.  Salomon  &  Sons, 

Nicol  &  Davidson, 

Nicol,  Cowlishaw  &  Co., 

E.  S.  J  affray  &  Co., 

Sam’l  McLean  &  Co., 

Kutter,  Luckemeyer  &  Co., 

E.  Oelbermann  &  Co., 
Bauendakl  &  Co., 

Forstmann  &  Co., 

David  Valentine  &  Co., 
Strassburger,  Fritz  &  Pfeiffer, 
Henry  Barbey  &  Co., 

C.  A.  Aufifmordt  &  Co., 
Fleitmann  &  Co., 

Duden  Freres  &  Co., 

Lord  &  Taylor, 

Martin  Bates,  jr.,  &  Co  , 
Stursberg  &  Co., 

A.  Erbsloh  &  Co., 

F.  Wigand  &  Co., 


Janssen,  Schmidt  &  Ruperti, 
Benkard  <fc  Hutton, 

H.  B.  Claflin  &.  Co., 

William  Watson  &  Co., 

Wendt,  Stein hauser  &  Co., 

E.  B.  Strange  &  Bros., 

Strange  &  Bro., 

Passavant  &  Co., 

Goetz,  Heinz  &  Co., 

Tay  &  Co., 

Despres,  Hartley  &  Co., 
McGrath  &  Hunt, 

Johnson,  Burns  &  Co., 

Hinck  Bros. 

Edward  J.  I£ing  &  Sons, 
Sylvester  Brush, 

Duncan,  Sherman  &  Co., 

Brown  Bros.  &,  Co., 

Maitland,  Phelps  &  Co., 

Aug.  Belmont  &  Co., 

Naylor  &  Co., 

Hermanu  Boker  &  Co.,. 

Chs.  T.  Tay  &  Son, 

Altbot,  Bergmann  &  Co., 

Fred'k  Victor  &  Achelis, 
Lackemanu,  Walkinshaw  &  Co., 
A  Person,  Harriman  &  Co., 
Edward  Scheitlin  &  Co., 

Sellman  &  Herved, 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION, 


LX  I 


Bittel  &  Tepel, 

Scheftel  Bros.  &  Co., 
Charles  Hauselt, 

Frederick  M.  Maas, 

D.  Wallerstein, 

F.  W.  Reimer, 

Oscar  Prolss  &  Co., 

Oscar  Delisle  &  Co., 

John  Vogt  &  Co., 

E.  V.  Welch  &  Co., 
Linuemann,  Wehry  &  Co.. 
Schultze  &  Tailer, 

Wm.  Maucher  &  Co., 
Henry  G.  Schmidt.  &  Co., 
Frederick  Ulrich  s, 
Fleischmann  &  Ulrichs, 
Hermann  Batjer  &  Bros., 
Gudewill,  Meyer  &  Co., 
Konig,  Meyer  &.  Co., 
George  Rogge  &  Co., 
Fischer  &  Rittenhaus, 


Escher  &  Co.. 


JuoLIICI  iX/  L/U.j 

A.  Rusch  &.  Co., 
John  Young  &  Son, 


Lehmaier  Bros. 
Rosensteiu  Bros. 


H.  W.  T.  Mali  &  Co., 

A.  De  Greiff  &  Co., 
Sclioenian,  Lingg  &  Co., 
Dieckerhotf,  Raffloer  &  Co., 
Butler,  Pitkin  &  Co., 

H.  &  M.  Kayser  &  Co., 


George  Pearce  &  Co., 
Edward  Unkart, 
Frederick  Hoose  &  Co., 
E.  N.  Taylor,  jr.,  &  Co., 
Louis  Weddigen  &  Co., 
Kessler  &  Co., 

Hardt  &  Lindgens, 
Stopfer  &  Streuli, 
Solmson,  Meyer  &  Co., 
C.  Morlot  &  Co. 


As  this  memorial  mentions,  a  similar  memorial  had  previously  been 
Xiresented  to  Collector  Grinnell. 

By  Collector  Murphy,  as  by  Collector  Grinnell,  the  voice  of  the  mer¬ 
chants  of  New  York,  though  reinforced  by  the  letters  of  Secretary 
Boutwell,  was  heard  with  the  same  utter  indifference. 

Hi  the  face  of  such  testimony  as  this — which  is  but  a  sample  of  a 
great  mass  of  testimony  scattered  through  more  than  2,100  pages  an¬ 
nexed  to  this  report — this  overwhelming  proof  of  systematized  extor¬ 
tion  carried  on  against  the  remonstrance  of  the  mercantile  community 
of  New  York,  who  will  hesitate  to  term  the  general-order  business,  as 
conducted  by  Leet  &  Stocking,  u  a  monstrous  abuse  and  a  scandalous 
system  of  robbery?” 


THE.  EXTENT  OF  THE  OPPRESSION. 


It  is  difficult  to  make  a  statement  of  the  precise  extent  to  which  the 
importations  at  New  York  are  subjected  to  general-order  charges.  In 
Report  No.  30,  Thirty-ninth  Congress,  second  session,  made  in  March, 
1867,  by  the  Committee  on  Public  Expenditures  of  the  House  of  Repre¬ 
sentatives,  we  find  the  following  statement,  which  we  believe  to  be  relia¬ 
ble.  We  here  insert  it,  with  the  comment  that,  with  the  increase  of 
commerce  since  that  date,  and  the  pressure  for  dispatch  which  has  grown 
with  it,  the  proportion  of  merchandise  which  goes  into  general-order 
warehouses  must  be  much  greater  now  than  then : 

All  merchandise  arriving  from  foreign  ports  is  in  peril  of  being  sent  under  general 
order.  This  arises  from  a  variety  of  causes:  the  necessity  of  dispatch  in  discharging 
the  vessel,  not  allowing  the  merchant  time  to  procure  his  permits;  discrepancies  be¬ 
tween  marks  and  numbers  on  the  custom-house  permits  and  those  on  the  cases  or  pack¬ 
ages  containing  the  goods  ;  sometimes  the  non-arrival  of  invoices  and  bills  of  lading 
prevent  the  granting  of  permits.  It  is  scarce  possible  to  approximate  an  average  pro¬ 
portion  of  the  imports  which,  in  the  course  of  a  year,  go  under  general  order.  (Steam¬ 
ers  now  enjoy  the  bulk  of  the  valuable  carrying  trade,  and  it  is  estimated  thus  full  a 
third  of  their  cargoes  are  subjected  to  general  order.  Sailing-vessels,  which  are  chiefly 
employed  in  the  transport  of  heavy  freights,  do  not  send  thus  so  large  a  proportion. 
Perhaps  a  more  accurate  idea  of  the  probable  extent  of  this  business  may  be  arrived 
at  by  an  examination  of  the  following  tables  prepared  for  the  committee’s  use  by  the 
Bureau  of  Statistics : 


LXII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Table  exhibiting  the  value  of  merchandise  imported  into  the  district  of  New  York  during  the 
fiscal  years  1862,  1863,  1864,  1865,  and  1866,  and  the  duty  on  merchandise  collected  during 
the  same  periods. 


Years. 

Valueofmerchandise. 

Duty  on  merchandise 
collected. 

1862 . 

$142,215,636 
177, 254, 415 
229, 506,  499 
154, 139,  409 
302, 505, 819 

$34,529,146  42 
48,636,648  68 
72,  406, 625  75 
55, 292, 513  76 
131, 823, 141  36 

1863 . . 

1864... . 

1865 . 

1866 . 

Total . . . 

1,  005, 621, 778 

342,688,075  97 

It  is  thus  seen  that  the  business  of  general-order  storage  and  cartage  incident 
thereto  must  necessarily  he  large,  and  conducted  at  the  proper  and  legitimate  rates 
fixed  after  years  of  experience,  should  be  proportionately  remunerative.  The  very  na¬ 
ture  of  the  business  and  the  requirement  that  “all  charges”  must  be  paid  before  deliv¬ 
ery,  prevent  a  close  scrutiny  into  the  correctness  of  these  manifold  charges.  No  notice 
will  be  taken  of  a  small  excess  ;  even  a  considerable  excess  might  be  passed  by  the 
politic  merchant,  who,  for  various  reasons  of  convenience,  dispatch,  &c.,  desires  the 
good  will  of  the  warehouseman.  Thus,  little  by  little,  these  charges,  by  constant  un¬ 
lawful  accretions  in  the  period  of  a  year,  might  aggregate  a  verj  considerable  amount 
from  each  importer.  It  will  be  seen  this  is  by  no  means  a  contingent  supposition. 

The  magnitude  of  the  general-order  business  and  of  its  legitimate  returns,  the  facile 
opportunity,  its  itemized  nature  admitting  the  constant  absorption  of  small  unlawful 
additions  thereto,  conspire  to  render  its  concession  or  lease  eagerly  sought  after,  as,  in 
broker’s  phrase,  capable  of  being  made  a  good  thing. 

THE  AMOUNT  OF  THE  PROFITS  OF  LEET  &  CO. 

“  The  general-order  business  was  tlie  best  prize  in  politics,  the  best  in 
the  city  of  New  York  f  so  says  John  P.  Lindsay,  vol.  1,  p.  46.  Other 
witnesses  describe  the  North  Kiver  general-order  business  as  u  the  big 
plum  in  politics.’7  The  substantial  result  of  the  testimony  is  that  the 
business  under  Leet  &  Co.  was  of  enormous  value.  So  far  as  Leet  & 
Co.  were  concerned,  no  means  were  afforded  to  the  committee  of  ascer¬ 
taining  the  precise  value  of  the  privilege.  By  various  witnesses  having 
knowledge  of  the  business,  it  is  estimated  as  being  worth  from  $60,000 
to  $200,000  per  year.  Mr.  S.  A.  Clark,  deputy  collector,  states,  vol.  1,  p. 
428,  that  it  is  the  most  valuable  appointment  or  perquisite  in  the  gift  of 
the  Government,  and  knows  of  none  equal  to  it,  except  certain  Indian 
agencies  of  which  he  has  heard,  but  of  which  he  has  no  knowledge. 
As  the  privilege  never  before  was  monopolized  by  a  single  firm,  so  ef¬ 
fectually  backed  and  supported  by  the  collector  of  this  port,  it  is  impos¬ 
sible  to  say  what  the  real  profits  of  Leet  &  Stocking  may  have  been. 
At  page  705,  volume  1,  Colonel  Leet  says: 

By  the  Chairman  : 

Q.  Who  are  the  partners  in  your  present  firm  ? — A.  Colonel  Stocking  is  my  only 
partner. 

Q.  Has  any  other  party  or  any  other  person  any  interest  in  the  receipts  of  your 
business? — A.  No,  sir. 

Q.  IIow  long  have  you  been  in  business  under  your  present  firm  ? — A.  Under  the 
present  firm-name  ? 

Q.  Yes,  sir  ;  since  you  have  had  contract  for  the  business  under  the  two  firm-names. 
— A.  It  is  a  period  of  about  twenty  months. 

Q.  Give  the  date  of  your  beginning. — A.  June,  1S70,  about  the  15th,  we  took  our  first 
store. 

Q.  What  have  been  the  expenses  of  your  business  from  that  time  to  the  31st  of  De¬ 
cember,  1871? — A.  The  expense  of  rent,  labor,  &c. ;  that  is,  the  incidental  expense  of 
fuel  and  lights - 

Q.  All  your  expenses. — A.  Ninety-four  thousand  three  hundred  and  eleven  dollars 
and  thirty-five  cents. 

Q.  From  the  15th  of  June  ? — A.  From  the  18th  of  June ;  I  find  that  that  is  the  date. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LXIII 


By  Mr.  Pratt  : 

Q.  That  includes  your  rent  ? — A.  Yes,  sir ;  hut  it  does  not  include  cartage,  howeyer ; 
that  I  have  separate. 

By  the  Chairman  : 

Q.  What  have  been  your  receipts? — A.  Two  hundred  and  three  thousand  nine  hun¬ 
dred  and  thirty-six  dollars  and  fifty-eight  cents  ;  that  includes  warehouse  and  general- 
order  business  bo  th. 

Q.  You  say  cartage  is  not  in  your  statement  of  expenses  ? — A.  Yes,  sir ;  that  is  a  sepa¬ 
rate  item. 

Q.  What  is  the  amount  ? — A.  Fifty-one  thousand  three  hundred  and  ninety-five  dol¬ 
lars  and  ninety-nine  cents. 

Q.  Does  that  include  both  warehouses  ? — A.  It  includes  371  Washington  street,  and 
Leroy  and  West  streets. 

Q.  Can  you  tell  what  was  the  amount  of  the  receipts  of  the  general-order  store  ? — A. 
I  cannot  give  you  that ;  we  do  not  go  into  the - 

Q.  You  keep  no  separate  account  of  that? — A.  We  have  not,  but  we  could  ascertain 
it.  Our  warehouse  profits  I  estimate  from  $6,000  to  $8,000  a  year — the  profits  on  ware¬ 
house  goods. 

By  Mr.  Howe  : 

Q.  You  keep  no  separate  accounts ;  what  do  you  mean  ?  Do  you  mean  that  the 
accounts  between  the  different  warehouses  are  not  distinct  ? — A.  Yes,  sir ;  they  are.  I 
speak  in  regard  to  warehouse  goods  and  general-order  goods. 

Q.  Those  accounts  are  not  kept  distinct  ? — A.  No,  sir. 

By  the  Chairman  :  1 

Q.  I  did  not  understand  what  you  estimate  the  profits  to  be. — A.  Six  to  eight  thou¬ 
sand  dollars  a  year. 

Q.  For  the  whole  time  or  for  one  year? — A.  For  a  year. 

Q.  That  is  the  bonded  warehouse  ? — A.  They  are  both  bonded  warehouses,  neces¬ 
sarily. 

Q.  That  includes  all  ? — A.  Yes,  sir.  I  think  that  is  a  low  estimate,  however. 

By  Mr.  Pratt  : 

Q.  That  extended  over  twenty  months,  and  would  make  your  profits  on  the  bonded 
warehouse  business  about  how  much  ? — A.  About  $12,000,  I  should  think. 

By  Mr.  Stewart  : 

Q.  Have  you  figured  the  profits  on  your  general-order  business  during  eighteen 
months? — A.  The  general- order  and  warehouse  together — the  whole  thing? 

Q.  What  do  you  figure  the  profits? — A.  Fifty-eight  thousand  two  hundred  and 
twenty-nine  dollars  and  twenty-four  cents. 

Q.  How  much  of  that  should  be  credited  to  the  warehouse,  and  how  much  to  the 
other? — A.  We  estimate  about  $12,000  as  the  profits  on  the  warehouse  goods. 

The  witness  did  not  undertake  to  swear  to  these  figures,  nor  that  he 
himself  had  ever  verified  them  in  any  way.  (Volume  1,  page  917  :) 

By  Mr.  Howe  : 

Q.  You  have  stated  here,  as  the  net  profits  of  the  general-order  business  and  the 
bonded  warehouse  business  during  the  period  of  twenty  months,  the  sum  of  $58,229.24  ; 
and  I  understand  you  to  say  that,  of  that  sum,  about  $12,000  represents  the  profits 
upon  the  bonded  warehouse  business  ? — A.  Yes,  sir. 

Q.  Leaving  as  the  net  profit  upon  the  general-order  business  proper,  $46,229.24  ? — A. 
About  that. 

Q.  Please  state  now  whether  you  have  verified  these  results,  or  have  these  results 
simply  been  handed  you  by  your  book-keeper  ? — A.  They  have  been  handed  mo  by  my 
book-keeper,  made  up  by  him-;  but  I  am  satisfied  they  are  correct. 

Q.  Are  you  in  the  habit  of  inspecting  the  books  day  by  day  ? — A.  Yes,  sir.  I  look 
over  the  books  nearly  every  day.  I  haven’t  had  time  recently  to  do  it. 

There  was  a  book-keeper  for  each  of  the  two  stores,  (ib.,  page  734,) 
but  neither  of  them  was  produced  as  a  witness  to  verify  these  figures : 

By  Mr.  Bayard  : 

Q.  Are  the  whole  accounts  of  the  two  firms  kept  as  distinct  as  though  they  were 
different  individuals  entirely  ? — A.  Yes,  sir. 

Q.  Composed  of  different  individuals  and  different  interests? — A.  Yes,  sir. 

Q.  Separate  book-keepers  ? — A.  Separate  book-keepers. 


lxiy 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Q.  And,  as  you  said,  the  whole  conducted  distinctly  ? — A.  Yes,  sir;  we  are  obliged  to 
have  separate  book-keepers  and  separate  cashiers.  Our  books  are  very  simple. 

LEET  &  STOCKING^  BOOKS  NEVER  BALANCED  AND  NEVER  PRODUCED, 
OR  ANY  STATEMENT  FROM  THEM. 

The  remarkable  fact,  however,  is  admitted  that,  although  carrying  on 
the  same  business  in  the  same  city,  at  two  different  points  and  under 
different  firm-names,  for  a  period  of  twenty  months,  the  books  of  Leet 
&  Stocking  have  never  been  balanced,  and  no  division  of  profits  made. 
(Volume  1,  page  754.)  This  omission  was  the  more'  extraordinary  on  the 
part  of  Leet,  whose  marked  business  capacity  and  experience  are  so  con¬ 
stantly  set  up  as  the  real  ground  of  his  wonderful  success  in  controll¬ 
ing  the  general  order.  The  reasons  given  by  him  are  not  only  unsatis¬ 
factory,  but  contradictory.  (Volume  1,  pages  754,755.) 

By  Mr.  Casserly  : 

Q.  You  and  Stocking  commenced  when — in  your  present  business,  I  mean? — A. 
About  six  or  seven  weeks  after  we  started  with  Mr.  Horton. 

Q.  Give  us  the  month  ? — A.  It  must  have  been  in  July  or  early  in  August,  1870. 

Q.  Then  you  are  now  nearly  nineteen  months  together  in  business? — A.  Yes. 

Q.  How  often  have  your  books  been  balanced  ? — A.  They  have  never  been  balanced. 

Q.  And  are  not  yet  balanced  ? — A.  No,  sir. 

Q.  Why  not? — A.  We  have  never  yet  made  a  division  of  profits,  and  there  was  no 
necessity  for  balancing  our  books.  The  books  are  very  simple,  and  it  is  only  necessary 
to  look  at  them,  and  make  a  few  figures  to  find  out  how  we  stand.  We  could  tell  in 
ten  minutes  how  we  stand,  without  having  the  books  balanced. 

Q.  The  ordinary  mode  of  ascertaining  the  business  of  a  house  is  to  have  the  books 
balanced? — A.  Yes,  sir.  We  don’t  expect  to  have  any  division  of  the  business  or 
balancing  of  the  books  until  our  contracts  from  the  stores  are  up. 

Q.  What  is  required  on  that  subject  by  your  articles  of  copartnership  in  regard  to 
balancing  books  or  settling  accounts  between  the  two  partners  ? — A.  I  believe  there  is 
nothing  said  on  that  subject  in  our  articles,  unless  it 'may  be  that  there  will  be  no 
division  of  profits  until  we  get  through  with  our  contracts.  . 

#*#*•*** 

Q.  Is  that  the  agreement? — A.  I  believe  that  is  the  agreement.  It  has  been  so  long 
since  I  have  seen  the  articles  of  copartnership,  I  really  forget. 

Q.  Your  copartnership  is  between  eighteen  and  nineteen  months  old  ? — A.  Yes. 

Q.  Is  it  possible  you  do  not  remember  what  your  partnership  articles  provide  on 
that  subject  ? — A.  I  do  not  remember,  sir. 

Q.  Do  not  your  articles  of  copartnership  provide  for  a  settlement,  or  a  division  of 
the  profits,  at  least  once  a  year  ? — A.  I  do  not  remember  that  they  do. 

Q.  Pardon  me  if  I  say  your  want  of  memory  is  very  remarkable  on  that  point.  Let 
me  read  to  you  what  you  swore  before  a  former  committee  of  investigation  of  the 
Senate.  On  page  93— a  question  by  Mr.  Patterson — “  Have  you  ever  divided  any  part 
of  the  profits  with  any  person  ? — A.  No,  sir,  not  a  cent,  except  with  the  partner  who 
is  engaged  with  me  now,  Mr.  Stocking.  We  have  not  divided,  because  the  articles  of 
copartnership  make  the  division  once  a  year.  Not  a  soul  has  received  a  cent  from  me 
as  a  division  of  the  profits  of  the  business.” — A.  The  matter  was  fresher  in  my  mind, 
I  presume,  at  that  time  than  it  is  now. 

Q.  At  that  time,  colonel,  you  swore  that  you  did  not  divide  the  profits  because  the 
year  had  not  expired  ;  in  other  words,  that  your  division  was  once  a  year  ? — A.  Yes. 

Q.  Now  I  understand  you  to  say  that  the  division  was  not  to  be  made  until  you 
could  see  your  way  clear  out  of  these  contracts  for  rent? — A.  That  is  our  understand¬ 
ing.  It  may  not  be  so  expressed  in  the  articles  of  copartnership ;  but  that  is  our 
understan  din  g. 

Not  only  were  their  books  never  balanced,  but,  although  they  were 
asked,  and  assented,  to  produce  their  books  and  papers  before  the  com- 
mitttee,  yet  the  production  never  was  made ;  and  as  one  or  both  part¬ 
ners  were  personally  present  during  the  whole  of  the  investigation,  as¬ 
sisted  by  counsel,  who  took  an  active  part  in  suggesting  questions  to 
witnesses  and  causing  witnesses  to  be  summoned,  the  omission  to  pro¬ 
duce  their  books,  even  in  their  confessedly  incomplete  state,  is  a  cir¬ 
cumstance  that  is  most  significant. 

The  indisposition  of  Leet  &  Co.  to  produce  their  books  and  papers, 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LXV 


or  to  furnish  any  reliable  statements  from  them,  has  been  very  marked 
throughout.  A  few  extracts  from  the  testimony  will  show  this. 

Thus,,  at  page  758,  volume  1,  Colonel  Leet’s  testimony  is : 

By  Mr.  Pp.att  : 

Q.  You  have  heen  asked  about  the  articles  of  your  copartnership  with  Mr.  Stock¬ 
ing  ;  how  long  is  it  since  you  have  read  those  articles  ? — A.  I  have  not  seen  them  for, 
I  think,  at  least  fifteen  months. 

Q.  Where  are  they  ? — A.  They  are  in  the  safe  at  the  store. 

Q.  These  articles  of  copartnership  will  speak  for  themselves.  Have  you  any  objec¬ 
tion  to  produce  them  and  laying  them  before  the  committee  ? — A.  None,  whatever. 

Mr.  P ii att.  I  wish  you  would  do  so,  and  that  will  settle  that  question. 

Notwithstanding  this  professed  readiness  to  produce  the  articles,  they 
never  were  produced. 

Colonel  Leet  failed  in  his  examination  to  account  for  $32,000  out  of 
$58,000,  the  profits  stated  by  him  upon  hearsay  from  his  book-keeper, 
at  the  Leroy  street  store,  who  himself  must  have  had  fully  one- third  the 
amount  upon  hearsay  from  the  book-keeper  at  the  other  store. 

Again,  same  page: 

By  Mr.  Pratt  : 

Q.  You  have  been  asked  what  disposition  has  been  made  of  the  profits  of  your  gen¬ 
eral-order  business,  and  your  bonded  warehouse  business;  and  you  have  given  an 
account  of  some  $17,  000  invested  in  railroad  bonds,  and  you  have  spoken  of  the  amount 
now  to  the  credit  of  the  concern  in  two  different  banks;  did  I  understand  you  to  say 
tha  t  your  books  would  show  what  became  of  every  dollar  of  the  profits  ? — A.  They 
will. 

Q.  Have  you  any  objection  to  furnish  the  committee  with  a  statement  of  what  dis¬ 
position  has  been  made  of  them  ? — A.  No,  sir. 

Mr.  Pratt.  I  will  ask  you,  then,  to  do  that  by  to-morrow.  That  will  settle  that 
question. 

Nevertheless,  the  books  never  were  produced,  nor  was  any  state¬ 
ment  ever  furnished. 

Again,  on  the  same  day,  (page  747 :) 

By  Mr.  Pratt  : 

Q.  Would  you  have  any  objection  to  have  your  books  subjected  to  an  examination 
by  this  committee,  or  by  such  person  or  expert  as  the  committee  may  designate  ? — A. 
None  whatever. 

Nothing  ever  came  of  this  either.  All  these  instances  were  on  Jan¬ 
uary  22,  1872,  in  New  York.  The  committee  did  not  adjourn  its  sit¬ 
tings  from  New  York  until  February  10.  It  was  not  want  of  time, 
therefore,  that  prevented  Leet  &  Co.  from  taking  any  step  to  lay  before 
the  committee  their  books  and  papers,  or  authentic  statements  from 
them. 

The  same  course  was  pursued  by  Leet  &  Co.  in  the  proceedings  of  the 
joint  committee  of  1871,  and  in  regard  to  the  same  general  subject  of 
the  receipts  and  profits. 

Thus,  at  page  97  of  the  report,  Leet  being  the  witness : 

By  Mr.  Sheldon  : 

Q.  You  mentioned  the  gross  receipts  for  one  week  were  $1,500  ? — A.  Yes,  sir. 

Q.  Please  furnish,  to  go  with  your  testimony,  the  gross  receipts  for  that  week,  so  that 
we  can  get  at  some  comparison,  and  state  whether  that  would  be  an  average.  — A.  I 
will.  From  the  expenses  and  gross  receipts  of  a  week,  you  could  not  form  any  idea  as 
to  the  year’s  business,  on  account  of  a  good  many  more  goods  going  under  general  order 
at  this  particular  time.  You  could  not  tell  the  amount  paid  for  cartage  either. 

This  was  on  February  18,  1S71,  and  the  committee  took  testimony 
in  New  York  as  late  as  March  3,  1871.  Yet  Leet  &  Co.  never  furnished 
the  statement  called  for  by  the  committee  and  promised  by  Colonel  Leet. 

Thus  the  significant  fact  is,  that  though  two  committees  sat  in  New 
York,  each  committee  for  several  weeks,  for  the  investigation  of  the 


LXVI 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


general-order  business  under  Leet  &  Co.,  yet  those  gentlemen  succeeded 
in  keeping  from  both  committees  all  inspection  of  their  books  and  papers, 
or  any  authentic  statement  of  their  receipts  and  profits  for  even  a  single 
week. 

Other  witnesses  well  qualified  to  speak  and  much  more  candid  than 
Mr.  Leet,  the  only  witness  who  was  produced  to  testify  to  Leet  &  Go’s 
profits,  and  who  testified  only  on  hearsay,  have  given  us  their  views 
of  the  subject.  Necessarily,  they  could  give  only  estimates.  All  of 
them  placed  the  profits  higher  than  Mr.  Leet  did — most  of  them  from 
three  to  six  times  as  high. 

A  witness  from  the  custom-house,  Thomas  L.  James,  deputy  collector 
of  the  warehouse  department,  estimated  in  1871  the  profits  at  $50,000 
to  $60,000.  (Report  of  1871,  page  105.) 

This  estimate,  from  a  friendly  source,  is  doubtless  far  below  the  truth. 
Collector  Grinnell,  during  his  first  days  in  office,  was  offered  by  an  offi¬ 
cial  in  the  custom-house  for  a  part  only  of  the  general  order  on  the  North 
River,  a  check  for  $50,000.  (Report  of  1871,  page  58.) 

Mr.  Francklyn,  agent  of  the  Cunard  line,  before  the  committee  in  1871, 
estimated  the  business  as  worth  u  $100,000  a  year  at  any  rate,  perhaps 
a  great  deal  more.”  (Page  15.)  In  1872  lie  re-affirmed  this  estimate 
before  the  Senate  committee. 

John  P.  Lindsay,  a  witness  having  peculiar  means  of  information 
from  his  connection  with  the  cartage  bureau  in  the  customs,  embracing 
the  cartage  of  all  packages  imported,  put  the  value  of  the  general  order 
in  Leet  &  Co.’s  hands,  and  at  their  rates,  at  not  less  than  $100,000  a  year. 
(Volume  1,  page  38.) 

Peter  M.  Moore,  the  managing  clerk  of  the  import  business  of  Phelps, 
Dodge  &  Co.,  and  for  twenty-six  years  in  their  service,  (volume  2, 
page  93,)  estimates  the  general-order  business,  as  enjoyed  by  Leet  & 
Co.,  as  being  “  cheap  at  $200,000  in  gold.” 

NUMBER  OF  PACKAGES  RECEIVED  BY  LEET  &  CO.  IN  GENERAL  ORDER. 

In  the  absence  ot  any  satisfactory  statement  by  Leet  &  Co.,  the  best 
data  for  an  estimate  of  the  value  of  the  general-order  business  as  man¬ 
aged  by  them  would  be  supplied  by  knowing  the  exact  number  of  pack¬ 
ages  received  by  them  in  the  course  of  the  year,  and  calculating  their 
average  charges  thereon.  Unfortunately  the  first  branch  of  these  data, 
as  to  the  number  of  packages,  was  not  supplied,  either  by  Leet  &  Co.  or 
by  the  custom-house  officers  in  charge  of  their  stores. 

J.  C.  Watson,  the  United  States  storekeeper  at  Leet  &  Co.’s  prin¬ 
cipal  store,  was  produced  by  them  as  a  witness.  Though  a  sworn  officer 
of  the  customs,  and  the  representative  of  the  Government,  whose  duty' 
it  was  to  send  to  the  custom-house  the  daily  statement  of  the  packages 
received  at  the  Leroy  street  store  of  Leet  &  Co.,  where  he  was  stationed, 
his  testimony  was  to  the  last  degree  worthless,  if  not  suspicious. 
He  and  an  associate  United  States  storekeeper,  Mr.  Crowell,  kept  the 
United  States  ledgers  of  packages  received.  Of  these  books  he  professed 
to  have  made  an  average  of  their  contents  in  packages.  This  average 
he  put  at  24  packages  to  the  page,  taking  29  as  the  highest  and  19  as 
the  lowest.  (Volume  1,  pages  674,  675.)  On  his  examination,  it  turned 
out  that  his  average  was  wholly  delusive,  and  that  on  many  pages  the 
actual  number  of  packages  ran  up  to  over  200.  He  had  counted  each 
entry  as  one  package,  though  frequently  a  single  entry  embraced  all 
the  way  from  25  to  over  100  and  sometimes  200  packages.  This  de¬ 
lusive  estimate  was  based  upon  a  single  one  of  several  large  ledgers. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LXVII 


of  GOO  pages  each,  which  he  produced  before  the  committee.  On  page 
678,  &c.,  volume  1,  he  testified  as  follows : 

By  Mr.  Casserly  : 

Q.  What  was  the  result  of  your  average  in  this  book  ? — A.  I  think  it  is  something 
over  60,000  packages.  I  don’t  remember  the  exact  number  now.  I  figured  it  with  a 
pencil. 

Q.  From  this  book  ? — A.  From  the  whole  number  of  books. 

Q.  I  want  to  know  in  this  book. — A.  In  that  book — I  don’t  know  whether  the  last 
two  or  three  pages  are  filled  or  not. 

Q.  It  is  written  up,  to  page  599. — A.  I  didn’t  figure  upon  that  one  book.  I  simply 
took  the  total  number  of  packages  we  have  entered  since  we  have  been  there,  and  I 
think  the  calculation  was  something  over  60,000  packages. 

Q.  I  desire  to  ask  you  a  question  or  two  upon  this  subject  of  averages.  Will  you 
take  that  book,  [the  witness  takes  the  ledger.]  You  say  that  tha  average  per  page, 
for  ten  pages  that  you  examined,  was  twenty-five  or  twenty-four  ? — A.  Twenty-four 
and  a  fraction. 

Q.  Twenty-four  and  a  fraction  to  a  page  ?  Tell  us  how  many  packages  that  would 
give  to  that  book  ? — A.  [After  figuring,]  14,277. 

Q.  I  understand  that  is  counting  each  entry  as  one  package  ? — A.  Yes,  sir. 

Q.  I  have  looked  over  a  few  pages  at  random.  Look  at  page  598,  and  do  you  not 
find  one  entry  of  fifty-nine  bales  ? — A.  Yes,  sir. 

Q.  How  many  entries  are  there  on  that  page  in  addition  to  that  entry? — A.  Twenty- 
two. 

Q.  That  makes  eighty-one  packages  on  that  page  ? — A.  Yes,  sir. 

Q.  Look  at  page  580.  Do  you  find  there  an  entry  of  ninety-two  bags  ? — A.  Yes,  sir. 

Q.  How  many7  entries  are  there  on  that  page  besides  that  ? — A.  Nineteen. 

Q.  That  makes  one  hundred  and  eleven  on  that  page,  does  it  not  ? — A.  Yes,  sir. 

Q,  Now  turn  to  page  485.  Do  you  find  an  entry  there  of  one  hundred  and  thirty- 
two  barrels  and  bales,  or  perhaps  the  number  is  in  two  entries  ? — A.  There  are  twenty- 
two  bags  in  one  entry,  seventy-five  barrels  in  one  entry,  and  twenty  -two  barrels  in 
another  entry. 

Q.  That  is  one  hundred  and  thirty-two  in  three  entries  ? — A.  Yes,  sir ;  and  two 
bags  in  other  entries  each. 

Q.  That  is  one  hundred  and  thirty-six  in  five  entries  ? — A.  One  hundred  and 
twenty-eight. 

Q.  How  many  entries  are  there  besides  that  on  that  page? — A.  One  hundred  and 
thirty -two  as  a  total  on  that  page. 

Q.  Look  at  page  395.  Do  you  find  there  an  entry  of  fifty  bags  ? — A.  Yes,  sir. 

Q.  In  one  entry  ? — A.  Yes,  sir. 

Q.  How  many  besides  are  there  on  that  page  ? — A.  Twenty-six. 

Q.  That  makes  seventy-six  on  that  page  ? — A.  Yes,  sir. 

Q.  Turn  to  page  385.  There  are  one  or  more  lots  of  several  packages.  I  have 
figured  up  a  number,  but  I  wish  you  would. — A.  The  total  is  two  hundred  and  fifty- 
one. 

Q.  In  how  many  entries  ? — A.  There  were  only  two  double  entries  ;  one,  two  hun¬ 
dred  and  twenty-eight  cases  of  wine,  and  the  other  is  two  casks ;  the  balance  are 
single  packages. 

Q.  How  many  entries  are  there  on  that  page  ;  that  is  what  I  wish  to  get  at  ? — A. 
Twenty-three. 

Q.  Look  at  page  384.  Do  you  see  an  entry  there  of  twenty  casks  ? — A.  Yes,  sir. 

Q.  How  many  entries  are  there  besides  ou  that  page? — A.  Eighteen. 

Q.  That  makes  thirty-eight  packages  in  all  on  that  one  page  ? — A.  Yes,  sir. 

Q.  Look  at  page  584.  Do  you  find  entered  forty  packages  there  ? — A.  Yes,  sir. 

Q.  How  many  single  entries  besides  are  there? — A.  Twenty-six. 

Q.  That  makes  sixty-six  ? — A.  Yes,  sir. 

Q.  Look  at  page  570.  Do  you  find  twenty-five  bales  in  one  entry  there? — A.  Yes, 
sir. 

Q.  How  many  single  entries  besides  ? — A.  Twenty-one. 

•  Q.  That  makes  forty-six  on  that  page  ? — A.  Yes,  sir. 

Q.  Your  estimate  having  been  on  an  average  of  twenty-four  packages  to  each  page, 
it  would  not  be  at  all  correct  for  that  book  ? — A.  Including  the  small  packages,  it 
would  not. 

Q.  And  the  barrels  or  bales  ? — A.  It  will  simply  give  the  number  of  entries  in  the 
book. 

Q.  It  simply  gives  the  number  of  entries  in  the  book  without  any  reference  to  the 
number  of  packages  included  in  any  entry  ? — A.  Exactly. 

Q.  In  a  few  minutes,  I  have  found  a  gre'at  many  cases  where  the  entries  included 
from  nineteen  up  to  two  hundred  and  twenty-eight  packages;  is  that  correct  ? — A. 
There  are  many  places  where  there  are - 


LXVIII 


NEW  YOKE  CUSTOM-HOUSE  INVESTIGATION. 


Q.  I  ask  you  if  1  have  not,  in  the  brief  examination  I  have/made  of  the  books, 
pointed  out  several  instances  where  single  entries  included  a  number  of  packages 
ranging  from  nineteen  to  two  hundred  and  twenty-eight  ? — A.  Yes,  sir. 

Q.  You  were  about  stating  something  when  I  interrupted  you  ? — A.  I  would  state 
that  at  the  end  of  each  steamer — you  perhaps  noticed  it  there — the  remainder  of  the 
page  is  left  blank.  If  there  is  only  one  entry  on  the  top  of  the  page,  I  don’t  com¬ 
mence  making  the  entries  from  any  steamer  on  that  page,  and  there  is  a  waste  of  per¬ 
haps  one-half  a  page  at  the  close  of  the  entries  from  each  steamer. 

Q.  Sometimes  the  paper  comes  out  just  right? — A.  Yes,  sir ;  but  oftener  there  is 
from  one-half  to  one-third  of  a  page  of  waste. 

The  witness  then  attempted  to  make  out  that  he  so  estimated  each 
entry  as  one  package  where  one  entry  embraced  several  packages,  be¬ 
cause  they  were  so  small  that  the  whole  were  about  equal  to  an  ordinary 
package  of  dry- goods. 

By  Mr.  Stewart  : 

Q.  You  speak  of  packages  that  are  brought  there ;  do  you  call  them  all  packages? — 
A.  We  call  them  just  as  the  inspector  calls  them  on  his  ticket.  If  he  calls  a  package  a  box, 
we  call  it  a  box,  unless  he  makes  a  mistake.  Sometimes  an  inspector  will  call  a  case 
a  bale  ;  if  he  makes  a  clerical  error  we  correct  it. 

Q.  What  are  the  class  of  small  articles  you  get? — A.  Little  boxes  of  tin  about 
eighteen  inches  square  perhaps  and  six  inches  through ;  and  cases  holding  a  dozen 
bottles  of  claret  or  a  dozen  bottles  of  brandy  or  a  dozen  bottles  of  wine,  and  kegs 
which  contain  these  Dutch  herrings — little  bits  of  kegs. 

X  *  X  *  *  *  X  * 

Q.  In  making  out  the  number  of  packages,  to  get  at  it,  these  should  be  separately 
stated  ? — A.  Yes,  sir,  I  should  think  so.  When  you  come  to  the  numerical  number, 
every  piece  you  receive,  of  course ;  you  must  actually  count  them.  Say  they  are  two 
hundred  and  fifty  boxes  of  wine ;  but  if  you  desire  to  count  the  goods  which  pays  a 
certain  price,  and  it  comes  within  a  certain  price,  then  you  have  a  different  calcula¬ 
tion. 

Q.  My  object  is  to  get  at  the  number,  so  as  to  see  the  amount  of  business  done  and 
the  receipts;  to  get  at  the  number  in  a  way  that  will  enable  us  to  see  how  much 
money  is  paid  to  the  general-order  stores,  if  we  can. — A.  I  would  state  that  to  make 
what  is  called  a  package  on  the  tickets,  it  would  take  twenty-fi^e  boxes  of  wine; 
that  is,  in  the  charges.  I  think  that  would  be  the  average. 

Here  the  witness  admits  the  important  fact  that  the  inspectors’ 
tickets,  which  are  the  tickets  sent  by  the  custom-house  officers  from  the 
ship  with  the  goods  to  the  general-order  store,  and  from  which  the 
entries  are  made  in  the  custom-house  books  kept  at  the  store — furnish 
no  real  data  whatever  for  ascertaining  the  actual  number  of 
packages  received. 

The  witness  went  on  to  develop  this  deceptive  system  of  entering  the 
goods : 

By  Mr.  Stewart  : 

Q.  Was  your  estimate  of  that  number  of  packages  here  averaged  in  that  way;  did 
you  give  us  about  what  would  be  the  equivalent  number  of  packages  of  dry-goods  ? — 
A.  If  I  was  to  answer  you  just  exactly  what  jiassed  in  my  mind  when  I  counted  that 
over,  I  would  say  that  was  iu  my  mind.  I  simply  ran  over  the  entries.  About  half 
the  wine  appears  there  entered  iu  bulk,  and  in  many  other  places;  in  about  an  equal 
number  of  places  it  appears  to  run  in  numbers  the  same  as  dry-goods.  When  we  speak 
of  the  actual  number  of  packages  received  in  the  warehouse,  we  mean  to  convey  the 
idea  that  the  packages  are  about  the  same  size  as  ordinary  dry-goods  packages,  and 
that  was  my  idea  when  I  counted  over  the  packages. 

Q.  Estimating  it  so  as  to  make  an  equivalent  of  packages  of  dry-goods  would  be  iv 
fair  way  to  estimate  it  in  order  to  get  at  the  receipts? — A.  If  you  are  getting  at  the 
receipts,  it  is  the  ouly  fair  way  to  get  at  them. 

Q.  It  would  not  be  fair  to  count  each  box  of  wine  and  each  box  of  tin  and  all  small 
packages  as  packages,  and  estimate  the  receipts  on  them  as  so  many  packages? — A. 
Not  as  packages  of  dry-goods  that  have  been  testified  to  as  being  charged  $1.25  each 
for,  because  the  charge  for  a  case  of  wine,  to  the  best  of  my  kpowledge,  for  the  first 
month  is  10  or  12  cents,  and  on  a  box  of  tin  about  14  cents. 

The  witness  having  just  before  stated  that  it  u  would  take  25  boxes  of 


LXIX 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 

wine  to  make  what  is  called  a  package  in  the  tickets,  that  is,  in  the 
charges,”  the  following  was  the  next  question : 

By  Mr.  Casserly  : 

Q.  According  to  that,  a  dry-goods  package  would  not  be  equivalent  to  twenty-five 
cases  of  wine  ? — A.  No,  sir.  I  see  I  have  made  a  miscalculation  on  that. 

Thus,  though  in  receiving  the  goods  at  the  general-order  store  and 
entering  them  there  in  the  United  States  books,  and  in  the  returns  made 
to  the  custom-house,  25  boxes  of  wine  would  be  rated 'as  one  package, 
ordinary  dry-goods  size,  yet  in  the  charges  exacted  by  Leet  &  Co.  they 
would  pay  at  least  twice  or  three  times  as  much. 

On  this  point  the  witness  further  said : 

By  Mr.  Casserly: 

Q.  Is  this  the  only  book  kept  for  the  period  it  covers  from  August  22,  1871,  to  Jan¬ 
uary  4, 1872?— A.  That  is  the  only  one  I  have  kept. 

Q.  Is  that  the  only  one  ? — A.  Mr.  Crowell  keeps  one  just  the  same.  He  has  filled 
another  ledger  of  the  same  size  in  about  the  same  ,time.  At  one  time  I  was  twenty- 
five  pages  ahead  of  him,  and  at  another  he  was  twenty-five  pages  ahead  of  me;  but 
our  business  is  divided  just  about  even. 

Q.  When  you  first  gave  your  evidence  here,  what  did  you  understand  you  were  asked, 
in  respect  to  what  was  contained  in  this  book?' — A.  The  number  of  entries  of  goods 
received. 

Q.  Did  you  not  understand  the  inquiry  to  be  for  you  to  state  the  number  of  pack¬ 
ages  ? — A.  I  counted  it  up.  I  counted  it  with  the  idea  of  packages  the  same  thing  in  size. 

Q.  That  was  not  the  idea,  though.  I  do  not  know  what  was  in  your  mind.  What 
was  it  you  intended  to  state  upon  the  basis  of  an  average  of  twenty-four  and  a  frac¬ 
tion  to  each  page  ? — A.  When  I  was  asked  the  question,  my  intention  was  to  show  the 
number  of  packages  there  were  in  the  book. 

Q.  Exactly ;  and  to  do  that  you  took  each  entry  as  representing  one  package  ? — A. 
Yes,  sir. 

*  *  #  #  *  #  # 

Q.  To  illustrate :  a  single  entry  contains  two  hundred  and  twenty-five  cases.  Sup¬ 
posing  them  to  be  wine,  you  would  not  liken  that  to  charges  upon  the  average  size  of 
a  dry-goods  box,  would  you  ? — A.  I  would  call  fifteeu  boxes  of  wine  equal  to  about  the 
storage  on  a  common  package  of  dry-goods  coming  from  the  other  side  of  the  river. 

Q.  What  are  the  charges  on  a  case  of  wTine  ? — A.  To  the  best  of  my  knowledge  and 
belief,  it  is  about  five  and  five,  and  five  for  the  first  month.  I  think  it  is  not  more 
than  that.  On  these  small  articles  which  I  have  mentioned  it  is,  perhaps,  a  cent  and 
a  half. 

Q.  I  am  speaking  about  boxes  of  wine. — A.  To  the  best  of  my  belief,  it  is  about  15 
cents  or  10  cents — somewhere  along  there. 

Q.  That  would  make  fifteen  cases  $2.25? — A.  I  made  a  mistake  in  my  statement.  I 
meant  to  say  ten  cases.  I  called  it  $1.50  from  the  other  side  of  the  river. 

Q.  Then  two  hundred  and  fifty  cases  would  be  equal  to  twenty-five  ordinary-sized 
dry-goods  boxes  ? — A.  That  is  my  opinion. 

This  would  make  a  single  entry  of  225  cases  of  wine,  though  classed 
as  a  single  average  dry-goods  package,  paying  $1.50,  pay  to  Leet  &  Co. 
$37.50,  in  their  “  general-order”  charges,  if  made  at  the  usual  rates 
charged  to  importing-houses  for  wine  in  cases. 

Leet  &  Stocking’s  charges  were,  however,  very  much  in  their  own 
arbitrary  discretion.  As  said  by  Mr.  Hutton,  (ante,  page  lv,)  u  it  ap¬ 
peared  to  be  a  mere  matter  of  caprice  more  than  anything  else. 

The  weight  or  value  of  the  package  was  made  by  them  a  pretext  for 
excessive  rates.  The  witness  further  testified  : 

By  Mr.  Bayard  : 

Q.  Have  you  seen  the  testimony  of  Mr.  Stocking,  delivered  here  last  night  f — A.  I 
was  present  when  hisxestimony  was  being  delivered. 

Q.  I  understood  Mr.  Stocking  to  say  that  the  general-order  charge  for  storage,  cart¬ 
age,  and  labor  was  graduated  by  the  bulk,  weight,  and  value  of  the  package. — A. 
That  is  correct. 

So,  also,  advantage  was  constantly  taken  of  private  persons  or  small 
traders  having  but  one,  two,  or  three  packages  in  Leet  &  Co.’s  general 
order. 


LXX 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Thus,  B.  Neustadt,  the  first  witness  before  the  committee,  (volume  1, 
page  1,)  had  to  pay  $2.50  each  for  two  cases  light  goods,  2J  feet  by  3, 
weighing  not  over  60  pounds  each. 

P.  Pohlaski,  another  small  trader,  was  charged  for  three  cases  of  cigars 
$8,  including  50  cents  cooperage.  This  bill  was  shown  by  Mr.  Howe  to 
Mr.  Stocking  on  his  examination  as  a  witness,  (volume  1,  page  659.) 

By  Mr.  Howe  : 

Q.  You  look  at  this  bill  of  Mr.  Pohlaski’s,  where  he  is  charged  for  three  months’ 
storage  $7.50,  and  cooperage  50  cents,  making  $8  for  three  cases. — A.  The  item  of 
cooperage  is  charged  for  xhe  same  as  we  pay  it  out.  If  a  package  requires  coopering, 
we  send  for  a  cooper  to  have  it  done. 

Mr.  Bayabd.  I  can  understand  how  those  packages  require  coopering,  from  the  letter 
which  accompanies  those  bills.  Have  you  any  other  comment  to  make  upon  them '? 

By  Mr.  Pratt  : 

Q.  I  would  like  to  inquire  in  this  connection  whether  there  is  any  higher  rate  of 
storage  for  cigars  than  for  any  other  package  ? — A.  Yes ;  the  rate  of  storage  is  different, 
according  to  quality  of  the  package,  and  the  care  in  handling  and  taking  care  of  it. 

By  Mr.  Bayard  : 

Q.  Have  you  any  other  comment  in  regard  to  this  charge  f — A.  I  have  made  no  com¬ 
ment  on  it. 

See  also  the  concurrent  testimony,  ante.  pp.  xlix  to  lix,  that  Leet  & 
Co.’s  general-order  charges,  even  to  large  importers  or  the  regular  custom¬ 
house  brokers,  averaged  from  $1.75  to  $2.25  per  package.  At  that  rate 
a  box  of  wine  would  pay  Leet  &  Co.  80  cents  instead  of  15  cents,  as 
stated  by  the  witness  Watson ;  and  220  boxes  would  pay  them  $176 
instead  of  $37.50. 

The  result  of  the  effort  of  Watson,  the  United  States  storekeeper, 
to  fix  the  number  of  packages  received  at  Leet  &  Co.’s  principal  store 
was  not  only  that  he  failed,  but  that  he  showed  that  the  books,  even  as 
kept  by  him  on  the  deceptive  principle  already  stated,  gave  a  very  much 
higher  average  than  that  sworn  to  by  him. 

On  February  7,  1872,  several  days  afterward,  having  had  an  oppor¬ 
tunity  meanwhile  of  again  examining  the  United  States  books,  Mr. 
Watson  was  recalled.  He  then  undertook  to  give  the  receipts  by  the 
books  for  1871 — on  the  peculiar  system  of  keeping  them — at  123,327 
packages  at  the  Leroy  street  store.  On  being  examined,  he  testified 
that  these  figures  showed  a  discrepancy  of  nearly  twenty-three  per  cent, 
with  the  statements  from  the  custom-house,  which,  on  his  first  exam¬ 
ination,  he  had  testified  were  made  up  from  the  duplicate  statements 
furnished  by  him  every  day,  and  therefore  should  agree  exactly  with 
his  books  at  the  store. 

Thus  he  said,  January  20,  1872,  (volume  1.  page  674:) 

By  Mr.  Stewart  : 

Q.  Is  there  any  officer  whose  duty  requires  him  to  keep  the  number  [of  packages]  ? 
— A.  No,  sir. 

Q.  I  mean  any  officer  of  the  custom-house  who  keeps  the  number  of  packages  sent 
to  the  general-order  warehouses. — A.  No,  sir.  The  custom-house  ledger  is  an  identical 
copy  of  ours.  The  book-keeper  there  makes  his  ledger  from  our  report,  the  same  as 
we  make  our  ledger  from  our  report. 

Q.  Who  does  get  it  up  lor  the  warehouse? — A.  When  we  are  through  with  the 
tickets,  we  sign  our  names  to  each  ticket  for  the  inspector  as  a  voucher  that  he  has 
sent  the  goods  to  that  store.  That  ticket  is  sent  over  to  the  entry-clerk  of  Leet  &  Co., 
and  he  takes  the  same  copy  that  we  do.  We  allow  him  the  use  of  the  ticket.  I  think 
I  have  a  ticket  here. 

After  leaving  the  stand  as  a  witness,  he  sent  in  to  the  committee  by 
letter  a  third  statement  of  the  packages  received  at  the  Leroy  street 
store,  differing  largely  from  each  of  his  other  two  statements. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LXXI 


Though  the  object  was  to  make  it  tally  with  the  custom-house  state¬ 
ment,  it  did  not  do  so  by  several  hundred  packages.  At  the  same  time 
he  adheres  to  his  former  count  of  89,487  packages  for  1871,  from  and 
after  March  15,  1871,  which,  adding  those  received  before  March  15,' 
1S71,  leaves  his  figures  for  1871  at  128,327  packages,  as  on  his  second 
statement  before  the  committee,  which  differed  over  22  per  cent,  from 
the  custom-house  statement.  (See  volume  2,  pages  6G0,  661,  and  669.) 

He  never  returned  to  be  examined  upon  his  third  statement  by  letter. 

The  general  result  is,  taking  his  three  statements  together  with  his 
testiihony,  that  the  number  of  packages  received  at  the  Leroy  street 
store  alone,  in  1871,  was  by  many  thousands  greater  than  his  highest 
figures. 

If  the  books  of  the  United  States  store-keeper  are  so  badly  kept,  as  we 
have  seen,  the  books  of  Leet  &  Stocking  are  not  so  kept  as  to  supply 
the  defect,  had  they  produced  them,  which  they  were  careful  not  to  do 
before  either  committee  in  1871  or  1872.  Mr.  Stocking  says,  (volume 
1,  page  666 :) 

Q.  Are  your  books  made  up  §o  as  to  show  the  total  number  of  packages  ? — A.  It  can 
be  got  from  the  books. 

Q.  Do  your  books  show  the  total  number  of  packages  made  up  month  by  month,  or 
at  the  end  of  the  year  ? — A.  No,  sir.  The  marks  and  numbers  of  the  packages  are  en¬ 
tered,  when  the  steamer  arrives,  in  a  hand-book  ;  and  then  as  they  go  out  the  delivery 
is  checked  upon  it.  If  they  remain  in  a  month,  so  that  they  accumulate,  the  boohs  are  ivritten 
up,  and  all  that  remains  on  hand  arc  written  in  a  larger  booh. 

Q.  Is  there  any  book  that  you  keep  that  will  show  the  number  of  packages  received 
during  given  period  “? — A.  The  books  will  show.  You  can  get  at  it  by  figuring  up. 

Q.  They  are  not  footed  ? — A.  They  are  not  made  up  from  week  to  week,  showing 
the  number  of  packages  received. 

Q.  Or  for  any  other  period  ?— A.  Not  for  packages.  The  amount  received  for  them 
is  footed  up.  You  can  get  no  idea  from  the  number  of  packages. 

This  testimony  is  significant.  No  package  is  posted  into  the  ledger  of 
Leet  &  Co.  unless  it  has  been  in  store  over  a  month.  As  is  fully  proved, 
the  great  majority  of  packages  stored  in  general-order  are  taken  out 
within  the  first  month.  Hence  the  great  majority  never  appear  in  Leet 
&  Co.’s  ledgers,  nor  anywhere,  unless  in  the  monthly  pass-books  known 
as  “  hand-books.” 

Though  the  great  majority  of  packages  are  taken  out  within  the  first 
month,  Mr.  Leet  testifies  that  their  twro  stores  had  a  capacity  for  30,000 
packages,  and  had  in  them  at  times  from  20,000  to  25,000  at  once.  (Vol¬ 
ume  1,  pages  718,  719.)  This  means,  of  course,  average  packages — the 
ordinary  dry-gocds  packages.  His  superintendent,  Van  Saun,  had  to 
admit  that  there  were  months  when,  if  the  general-order  goods  had  to  stay 
a  month,  the  stores  would  not  have  held  them.  (Volume  2,  page  210.)  This, 
though  a  certain  proportion  of  the  packages,  though  charged  full  rates, 
never  enter  the  store,  being  “permitted”  at  the  door.  (Ibid.,  210,  211.) 

We  are  not,  however,  left  without  much  better  data  as  to  the  number 
of  packages  received  by  Leet  &  Co.  in  general  order  than  those  afforded 
by  them  to  the  committee. 

Daniel  H.  Tompkins,  deputy  collector  in  charge  of  the  public  (ap¬ 
praisers’)  store,  where  certain  classes  of  dutiable  goods  go  for  examina¬ 
tion  and  appraisement,  testified  as  to  the  number  of  packages  received 
there  for  the  last  four  years — 1868, 1869, 1870, 1871 — (volume  2,  pages  15, 
16,  &c.,)  showdng  a  steady  increase  from  year  to  year.  In  1868  the 
number  was  137,000  and  odd;  in  1869  it  was  161,800;  in  1870  it  was 
200,000 ;  in  1871  it  was  226,070.  In  the  year  1871  the  packages  re¬ 
ceived  averaged  733  for  every  working-day.  Occasionally  1,000  to  1,200 
were  received.  All  this  business  was  done  at  one  receiving-door.  (Ibid, 
page  30.) 


LXXII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


On  these  figures  two  or  three  things  are  to  be  noted. 

Only  certain  classes  of  goods  require  appraisement  at  the  public 
store  5  and  of  these  generally  but  one  package  in  ten  actually  goes 
there.  This  is  nearly  always  true  of  the  mass  of  goods  imported  in 
invoices  by  the  importing  houses.  The  proof  before  the  committee  is 
of  one  voice  ou  this  subject.  Sometimes  where  there  is  a  heavy  invoice 
of  one  class  of  goods,  but  one  package  in  twenty  goes  to  public  store. 
In  appraising  wines,  such  as  champagne  or  claret  imported  in  large 
quantities  in  boxes  of  a  dozen  each,  it  often  happens  that  but  one  box 
in  fifty  goes  there. 

Many  classes,  especially  the  great  staples  of  food,  never  go  to  the 
public  store.  They  are  sampled  from  one  out  of  ten,  twenty,  or  more 
packages  on  the  wharf  or  warehouse,  bonded  or  general  order.  This  is 
specially  true  of  sugar,  tea,  coffee,  liquors,  molasses,  &c.  Also  soda- 
ash,  metals  in  bars,  bundles,  or  boxes,  &c.  (Ibid,  page  20.) 

Lastly,  a  considerable  proportion  of  packages  are  free  goods,  with 
which  the  appraisers  have  nothing  to  do,  though  they  are  just  as  liable 
as  any  other  to  get  into  “  general  order.*7 

Thus  a  receipt  of  226,000  packages  at  the  public  stores  in  1871  would 
indicate  a  total  of,  say,  3,000,000  packages,  dutiable  and  free,  imported 
in  that  year. 

John  P.  Lindsay  testifies  (vol.  I,  p.  66,  &c.)  that  while  he  was  with 
Collector  Grinnell,  they  estimated  after  investigation  of  papers  and  data, 
the  packages  going  into  general  order  to  be  twice  as  many  as  those  going 
into  the  public  store. 

This  estimate  the  witness  says  was  made  for  the  summer  months, 
when  importations  were  lightest,  and  fewest  goods  went  into  general 
order.  It  is  doubtless  much  below  the  truth. 

Yet  taking  his  estimate,  it  shows  that  in  1871,  452,000  packages  went 
into  general  order.  Of  these  Leet  &  Stocking  had  at  least  four- fifths,  or, 
say,  360,000  packages. 

This  estimate  reconciles  the  leading  facts. 

Thus,  in  1871  the  Government  received  at  the  public  store,  by  a  single 
receiving-door,  226,000  packages. 

In  the  same  year  Leet  &  Co.  had  at  their  principal  store  (Leroy  street) 
ten  doors  for  receiving  and  delivering,  (Stocking’s  testimony,  vol.  1,  p. 
645,)  and  at  both  stores  they  received  and  delivered  at  ten  doors,  as 
their  superintendent,  Van  Saun  testifies.  Yet  they  would  have  us  be¬ 
lieve  that  at  both  stores  having  twelve  to  sixteen  doors,  with  ten  of  them 
frequently  in  use,  they  received  in  1871  but  160,000  packages,  w7kile  the 
Government  the  same  year  received  into  the  public  store  at  a  single 
door  226,000  packages. 

This,  though  the  same  proceedings  as  to  examining  and  entering  were 
required  in  each  place,  the  same  marking  as  to  u  bad  order,”  the  only 
additional  work  done  by  Leet  &  Co.  being  the  entries  as  to  their 
charges. 

Upon  the  figures  already  given  by  us  from  the  best  official  data ,  it  is 
impossible  to  put  the  number  of  packages  received  by  Leet  &  Co.  in 
general  order  at  less  than  360,000  in  1871.  This  agrees  also  with 
their  own  admissions,  that  though  the  great  majority  of  packages  in  gen¬ 
eral  order  remained  but  a  few  days  of  the  first  month,  they  had  at  times 
in  their  two  stores  from  20,000  to  30,000  packages  at  once.  They  rented 
those  stores  because  they  required  a  capacity  for  that  number  of  pack¬ 
ages.  At  an  average  of  $1.50 — they  admit  an  average  of  $1.36 — that 
number  of  packages  would  produce  gross  $540,000,  yielding  net,  at  the 
rate  of  profit  shown  by  them,  $172,000  per  annum. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LXXIII 


These  figures  as  to  money  receipts  agree  remarkably  well  with  details 
given  before  the  joint  committee  in  1871  by  a  most  competent  witness, 
Mr.  Edward  Francklyn,  for  many  years  the  agent  of  the  Ounard  line 
and  manager  of  their  great  general- order  business  at  their  warehouses 
in  Jersey  City.  He  says : 

Q.  What  do  yon  think  of  that  monopoly,  if  it  is  a  monopoly?  What  is  it  worth 
to  this  company? — A.  They  work  it  very  cheaply.  They  never  hoist  any  goods  if  they 
can  help  it,  and  they  keep  goods  waiting  outside  on  the  street  until  they  can  get  rid  of 
those  on  the  ground  floor,  to  save  labor,  &c.  I  should  think  their  gross  receipts  from 
that  business  must  be  $15,000  a  week — say  $10,000  a  week,  auy  way. 

Q.  Making  $520,000  a  year? — A.  Yes;  but  of  course  there  is  a  good  deal  of  labor  to 
be  deducted  from  that.  I  should  think  it  was  worth  $100,000  a  year  at  any  rate,  per¬ 
haps  a  great  deal  more. 

If  the  facts  were  otherwise,  it  is  remarkable  that  Leet  &  Co.  so  indus¬ 
triously  evaded  showing  them  by  their  own  books. 

This  conduct  in  the  face  of  so  much  evidence  of  very  large  receipts  in 
general  order  raises  the  strongest  presumption  against  them. 

The  fact  is  stated  by  Leet  &  Stocking  that  no  profit  accrued  to 
them  from  the  item  of  cartage.  Yet  it  was  proven  by  sundry  wit¬ 
nesses  engaged  in  the  business  of  warehousing  that  a  load  of  2£  to 
4J  packages  on  the  average  was  carried  at  the  same  price  for  the  load 
as  Leet  &  Co.  charged  for  a  single  package.  Mr.  Bixby  and  Mr.  John¬ 
son  each  state  the  profit  upon  cartage  to  be  very  considerable.  Certain 
it  is  that  the  general-order  privilege  was  more  sought  after  than  any 
other  connected  with  the  New  York  custom-house.  It  was  deemed  so 
valuable  by  those  who  understood  it,  that  it  had  always  been  divided 
among  many  parties,  and  when  it  became  a  monopoly  and  freed  from 
all  effects  of  competition  the  profits  must  indeed  have  been  enormous. 

The  capital  to  start  this  concern  was  put  in  by  a  partner,  one  Mr. 
Horton,  who  was  soon  discarded  from  the  firm.  The  amount  was  not 
over  $1,000,  which  was  really  all  the  capital  of  the  original  concern. 
(See  Horton’s  testimony,  page  31  of  the  report  of  the  Patterson  com¬ 
mittee;  also  Leet’s  testimony,  volume  1,  page  730,  present  report.) 

WHO  WERE  LEET  &  STOCKING? 

The  question  may  now  well  be  asked,  Who  were  Leet  &  Stocking? 
How  did  they  obtain  this  valuable  business  and  enjoy  the  monopoly  of 
it  for  so  long  a  time  in  defiance  of  the  remonstrances  of  the  merchants 
of  New  York,  of  public  opinion,  of  the  opinion  of  the  Secretary  of  the 
Treasury  and  his  expressed  wishes  on  the  subject  ?  (See  letters  of  Secre¬ 
tary  Boutwell  to  Collector  Grinnell  and  Collector  Murphy.) 

WHAT  WAS  u  THE  MYSTERIOUS  POWER” 

which  sustained  Leet  &  Stocking  in  their  oppressive  position  of  oppres¬ 
sion  and  extortion  from  September,  1870,  even  until  March,  1872? 

We  propose  to  answer  this  question  by  a  summary  statement  of  the 
facts.  The  testimony  of  George  K.  Leet  will  be  found  at  pages  (100 
to  701,  volume  1.  At  the  breaking  out  of  the  war  he  was  a  clerk  in  a  rail¬ 
road  company  at  Chicago,  and  enlisted  as  a  private  in  the  Army  in  1802. 
He  was  detailed  for  duty  in  1803  as  a  clerk  at  General  Grant’s  headquar¬ 
ters  at  Yicksburgh,  and  continued  to  perform  clerical  service  at  head¬ 
quarters  until  the  close  of  the  war.  He  was  commissioned  an  assistant 
adjutant  general  in  the  Army,  and  was  detailed  for  duty  under  General 
Rawlins  at  the  War  Department,  being  occupied  until  the  time  of 
his  resignation  in  1870  in  “making  up”  General  Grant’s  military  record. 


LXXIV 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


About  two  months  prior  to  General  Graut’s  inauguration,  Leet  states 
that  he  had  some  conversation  with  General  Grant  about  the  general- 
order  business  in  New  York,  (volume  1,  pages  707  and  744.)  Leet,  who 
had  previously  been  inquiring  into  the  matter,  says  he  told  General 
Grant  u  as  much  as  he  knew  of  it  himself.”  (Page  744.)  The  result 
was  that,  on  the  19th  of  March,  1869,  Leet  received  a  letter  from  the  Presi¬ 
dent,  wrritten  in  his  own  hand,  at  a  private  audience  in  his  room  at  the 
White  House,  as  follows : 


Executive  Mansion, 
Washington ,  D.  C.,  March  19,  1869. 

Dear  Sir:  This  will  introduce  yon  to  Colonel  G.  K.  Leet,  who  served  under  me 
from  early  in  the  war  to  the  present  day — from  the  fall  of  Vicksburgh  forward,  as  a  stalf 
officer.  He  is  a  business  man  of  unquestioned  integrity.  His  experience  before  the 
war  fits  him  for  business  of  almost  any  kind.  He  now  proposes  to  resign  from  the 
Army  to  engage  in  private  life,  and  I  cheerfully  commend  him  as  possessing  all  the 
qualities  necessary  to  inspire  confidence. 

Yours,  truly, 

U.  S.  GRANT. 


M.  H.  Grinnell. 


Armed  with  this  and  another  letter  from  Mr.  Washburne,  the  Sec¬ 
retary  of  State,  which  he  never  used,  Leet  set  out  for  New  York  to  see 
Mr.  Grinnell,  present  the  letter,  and  arrange  about  the  general-order 
business.  It  is  a  noticeable  fact  that  Leet  then  informed  Mr.  Grinnell 
that  he  was  to  be  appointed  collector,  which  appointment  followed  in 
a  few  days.  Leet  testifies  (page  745)  that  at  the  time  he  received  the 
letters  from  General  Grant  he  asked  his  permission  to  inform  Mr.  Grin¬ 
nell  that  he  would  be  appointed,  and  that  he  took  General  Grant’s 
silence  as  assent.  It  also  appears  by  Lindsay  and  other  witnesses  that 
Leet  carried  to  Grinnell  the  first  information  that  he  would  be  appointed. 

After  Mr.  Grinnell’s  installation  in  office,  Leet  renewed  his  applica¬ 
tion  for  the  general-order  business.  He  had  no  other  recommendation 
than  the  letter  of  General  Grant  above  stated.  He  was  an  entire 
stranger  in  New  York,  unknown  to  the  people,  and  without  any  other 
influence  to  obtain  the  business  he  sought  (and  in  which  he  was  totally 
inexperienced)  than  was  derived  from  the  President’s  letter  of  recom¬ 
mendation.  Political  considerations  seemed  to  embarrass  Mr.  Grinnell 
in  granting  his  wishes.  At  page  261,  volume  3,  in  the  testimony  of  Mr. 
George  W.  White,  is  the  following  account  of  Mr.  Leet’s  interviews  with 
Mr.  Grinnell,  as  given  by  Leet  himself  to  the  witness,  who  had  known 
Leet  in  the  Army  and  subsequently.  The  witness  testified  that,  in  May, 
1869,  Leet  showed  him  the  President’s  letter : 

By  Mr.  Bayard  : 

Q.  The  letter  of  the  President  ? — A.  The  letter  of  the  President. 

Q.  To  Mr.  Grinnell  ? — A.  No,  a  letter  of  the  President  to  him.  Yes,  to  Mr.  Grin¬ 
nell — the  letter  that  he  brought  to  Mr.  Grinnell.  He  also  spoke  of  some  interview 
that  he  had  had  with  Grinnell  when  he  came  to  New  York,  and  that  ho  felt  somewhat 
chagrined  to  think  that  he  had  not  received  his  commission. 

Q.  Did  he  say  anything  about  whether  he  had  taken  Mr.  Grinnell’s  commission  on 
to  him  ? — A.  I  am  quite  confident  that  he  remarked  to  me  that  he  had  brought  over 
Grinnell’s  commission.  Ho  first  notified  him  of  his  appointment,  and  afterward 
brought  his  commission.  * 

Q.  Did  he  ever  tell  you  anything  in  relation  to  his  having  had  a  difficulty  with  Mr. 
Grinnell  respecting  this  general  order  and  disappointment  about  Grinnell’s  action  ?— A. 
Well,  yes,  sir.  He  remarked  to  me  at  one  interview  that  we  had — it  was,  I  think,  the 

second  Sunday  after — there  were  two  Sundays  that  he  came  to  my  rooms - 

Q.  This  was  in  the  city  of  New  York  ? — A.  This  was  in  the  city  of  New  York.  That 
he  had  had  an  interview  with  Grinnell,  where  he  had  expressed  his  opinion  to  him  in 
regard  to  his  not  having  given  him  this  business.  As  I  had  understood  it,  there  were 
political  influences  at  work  not  to  give  him  but  a  small  portion  of  the  business  ;  but 
he  told  me  he  came  for  all  of  it,  and  he  was  going  to  have  it  or  not  any  ;  that  he  had 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LX  XV 


had,  a  day  or  two  previous  to  these  interviews,  an  interview  with  Grinnell,  and  had 
given  him  to  understand  that  if  he  could  not  get  it  from  him,  he  would  have  a  col¬ 
lector  that  he  could  get  it  from.  He  said  that  he  had  told  Mr.  Grinnell  that. 

Q.  That  he  had  told  Mr.  Grinnell  that  ? — A.  Yes,  sir ;  and  he  told  me  that  he  offered 
him  a  very  small  proportion,  which  he  did  not  propose  to  accept  at  all. 

Q.  Grinnell  had  ?— A.  Yes,  sir. 

Q.  Did  he  say  anything  of  the  force  of  the  letter  that  he  brought  ? — A.  When  he 
showed  me  that  letter,  he  remarked  that  he  thought  there  was  not  any  further  order 
required;  at  least  supposed  that  that  would  get  him  the  work  at  once  ;  that  that  letter 
was  sufficient  as  an  order ;  in  fact,  that  he  should  have  the  business,  and  he  had  con¬ 
sidered  it  so  understood  for  some  little  time. 

Q.  That  if  he  did  not  get  the  business,  and  the  whole  that  he  wanted,  from  Grinnell, 
he  would  have  a  collector  that  he  could ;  and  he  told  you  that  he  had  told  Grinnell 
that  ? — A.  He  gave  me  to  understand  that  he  had  said  those  words  to  Grinnell. 

Q.  Did  he  say  anything  to  you  then,  or  at  any  time  subsequent,  of  Mr.  Grinnell  hav¬ 
ing  offered  him  a  sum  if  he  would  just  go  back  to  Washington  and  abandon  the  pursuit 
of  this  business? — A.  He  offered  him  $5,000  a  year  if  he  would  remain  in  the  Army,  and. 
go  back  to  Washington  and  remain — he  would  give  him  $5,000  a  year,  and  send  it  to 
him  monthly. 

Q.  That  was  Grinnell’s  offer,  if  he  would  abandon  the  search  for  this  business  ? — A. 
Yes,  sir ;  for  the  whole  business. 

Q.  Are  you  distinct  about  that — do  you  remember  that  ? — A.  I  remember  that  con¬ 
versation  very  well. 

Q.  When  did  that  occur  ? — A.  Either  the  latter  part  of  May  or  the  first  of  June,  1869. 

Q.  Of  1869  ?— A.  Yes,  sir. 

Q.  That  he  had  this  proposition  from  Mr.  Grinnell  if  he  would  abandon  this  scheme 
of  getting  this  general-order  business,  and  go  back  to  the  Army  and  stay  there  ? — A. 
Keep  his  present  position  and  return  to  Washington. 

The  most  of  this  testimony  is  corroborated  by  John  P.  Lindsay,  who 
held  a  confidential  relation  to  Mr.  Grinnell  while  collector.  (See  vol.  1, 
pp.  36,  37,  38,  39,  40,  42,  45.)  Also  by  B.  F.  Mudgett  and  others. 

In  a  short  time  an  arrangement  was  effected  with  Mr.  F.  M.  Bixby, 
by  which  a  portion  of  the  general-order  business  was  controlled  by 
Beet’s  influence  to  one  of  Bixby ’s  warehouses.  For  this  Beet  was  to 
receive  the  sum  of  $5,600  per  annum,  and  a  contingent  compensation 
in  addition.  This  transaction  for  Beet’s  benefit  was  accomplished, 
so  far  as  Collector  Grinnell  was  concerned,  by  an  order  (volume  1, 
page  56)  directing  all  u  general- order  ”  goods  on  the  North  River  side, 
excepting  the  National  and  Inman  lines,  to  be  sent  to  u  such  store 
or  stores  as  might  be  indicated  by  J.  P.  Lindsay  and  those  associ¬ 
ated  with  him.”  Lindsay  had  no  interest  in  the  business.  It  was  simply 
a  contrivance  for  covering  up  Leet  and  his  associates,  if  any.  (See 
Lindsay’s  testimony,  vol.  1,  pp.  56,  70.)  The  memorandum  between 
Leet  and  Bixby,  which  was  in  Leet’s  own  handwriting,  (page  728,)  is 
as  follows : 


New  York,  July  20,  1869. 

F.  M.  Bixby  guarantees  to  the  party  controlling  the  general-order  business  of  the 
North  River — excepting  the  Inman  and  National  lines  of  steamers — the  sum  of  $5,625 
per  annum,  profits,  payable  in  monthly  installments,  in  advance,  and  should  the  receipts 
from  the  storage  of  general-order  goods  exceed  the  sum  of  $10,000  per  annum,  then 
the  amount  in  excess  to  be  equally  divided  between  Mr.  Bixby  and  the  copartner, 
whose  influence  directs  the  business  to  his  warehouses.  It  is  understood  that  all  re¬ 
ceipts  from  storage  of  general-order  goods  are  to  be  considered  as  profits,  Mr.  Bixby 
furnishing  warehouse  room  as  an  equivalent  for  the  influence  above  quoted.  Should 
this  arrangement  be  continued  beyond  one  year,  then  the  sum  to  be  guaranteed  to  be 
$5,000  per  annum.  This  to  take  effect  July  15,  1869. 

This  agreement  being  concluded,  Leet  returned  to  Washington,  where, 
at  that  time  and  during  nearly  the  entire  period  of  his  contract  with 
Bixby,  he  was  living  in  the  same  house  and  messing  with  the  President’s 
secretaries,  Generals  Porter  and  Babcock,  receiving  regularly  his  re¬ 
mittances  from  Bixby,  through  J.P.  Lindsay,  with  whom  he  corresponded 
frequently,  dating  his  letters  from  the  Executive  Mansion,  arranging 
S.  Rep.  227 - VII 


LXXVI 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


interviews  between  Porter  and  Lindsay,  (volume  1,  page  742,)  continu¬ 
ing  bis  position,  and  drawing  his  pay  as  an  officer  of  the  Army. 

“  THE  MESS.’7 

Lindsay  tells  us  that  Leet  complained  of  his  income  as  too  small  for 
his  share  of  “the  mess.”  (Yol.  1,  p.  577.) 

Q.  Did  lie  make  any  statement,  at  any  time,  in  regard  to  a  mess  that  he  was  con¬ 
nected  with,  which  led  him  to  greater  expense  ? — A.  Yes,  sir ;  that  was  so.  His  mess¬ 
mates  at  Washington,  he  said,  called  for  expense,  and  he  had  to  hear  his  proportion 
of  it. 

Q.  Do  you  know  who  his  associates  were  in  that  respect? — A.  No  further  than  he 
told  me. 

Q.  What  were  his  own  statements  to  you  on  that  subject  ? — A.  General  Porter  and 
General  Babcock - 

Q.  Repeat  his  reason  for  stating  to  you  the  inadequacy  of  this  sum  of  $5,625  a  year 
to  sustain  this  mess.  Give,  as  near  as  you  can,  his  language  on  that  subject. — A.  It 
would  be  impossible  for  me  to  give  his  language. 

Q.  Give  the  substance.— A.  The  substance  was,  that  that  would  not  pay  his  propor¬ 
tion  of  the  mess;  what  he  got  here  would  not  support  him.  One  reason  why  he  re¬ 
mained  in  the  Army,  as  I  understood  at  the  time,  was  to  get  an  additional  sum. 

Q.  Did  he  give  you  to  understand  that  the  gentlemen  whom  you  have  named  com¬ 
posed  the  mess  ? — A.  lres,  sir ;  that,  I  believe,  was  a  fact  known  to  a  good  many. 

Despite  Leetfs  repeated  and  flat  denials  of  the  existence  of  “  the  mess,” 
as  though  he  knew  there  was  something  there  to  be  covered  up,  he  was 
as  flatly  contradicted  by  his  own  letter.  (Yol.  1,  pp.  744,  750,  751,  760.) 

Leet  resigned  from  the  Army  August  1,  1870,  availing  himself  of  bis 
right,  under  the  law,  to  one  year’s  full  pay  from  that  date  as  lieutenant 
colonel,  about  $2,850.  He  returned  to  New  York  and  endeavored  to 
obtain  from  Mr.  Grinnell  the  whole  of  the  general-order  business,  and, 
according  to  the  evidence  of  White  and  Lindsay,  threatened  Mr. 
Grinnell  with  removal  if  his  demands  were  not  complied  with.  Mr.  Grin¬ 
nell  did  not  comply  with  his  demands  and  certainly  was  removed,  and 
Mr.  Thomas  Murphy  appointed  in  his  stead  in  July,  1870.  Early  in 
September  following  Mr.  Leet,  who  had  by  that  time  in  some  way — 
which  he  does  not  account  for  definitely — become  associated  with  Mr.  W. 
F.  Stocking,  commenced  with  him  to  carry  on  the  warehouse  business. 

About  the  same  time  Mr.  Murphy  very  promptly  complied  with  Mr. 
Leet’s  requirements,  and  secured  to  him  and  his  partner  the  monopoly 
of  the  general-order  business  of  the  North  River  side,  and  continued 
during  his  official  term,  which  ended  in  November  or  December,  1871,  to 
uphold  the  firm  in  the  gross  abuses  and  scandalous  extortions  disclosed 
by  the  testimony ;  and  was  himself  upheld  at  Washington  in  upholding 
them  in  defiance  of  public  opinion,  the  petitions  of  the  mercantile  com¬ 
munity,  and  against  the  judgment  and  wishes  of  his  official  superior,  the 
Secretary  of  the  Treasury.  (Murphy’s  testimony,  vol.  3,  pp.  382,  &c.) 

In  the  light  of  the  foregoing  facts,  can  it  be  in  the  least  doubted  that 
Leet,  having  originally  discussed  the  general-order  business  with  the 
President,  and  his  desire  and  intent  to  obtain  it,  received  from  him  the 
letter  to  Mr.  Grinnell ;  and  that,  by  means  of  that  letter,  and  it  alone, 
and  his  relations  with  the  President,  and  with  his  consent  and  approval, 
the  business  was  obtained  by  him  ?  It  is  true  that  Leet  states  that  al¬ 
though  he  left  “  the  mess”  at  Washington  to  go  to  New  York  to  obtain 
this  business,  and  although  the  President  and  his  messmates  knew  the 
object  of  his  visit,  yet  that  he  never  informed  them  whether  he  had 
succeeded  or  failed,  but  kept  them — his  particular  friends  and  well- 
wishers — in  complete  ignorance,  although  to  comparative  strangers  like 
White,  Lindsay,  Bixby,  Mudgett,  and  others,  the  position  of  his  affairs 
seems  to  have  been  well  known. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LXXVII 


We  might  accept  this  extraordinary  story  for  what  it  is  worth  but  for 
the  awkward  fact  that  Mr.  Leet  was  frequently  contradicted  on  material 
points  in  his  testimony  by  other  witnesses,  and  even  by  himself  and  by 
hisown  letters  when  produced  for  his  inspection.  These  contradictions 
are  too  numerous  for  us  to  do  more  than  to  refer  to  them  in  the  testi¬ 
mony,  especially  his  own. 

Though  we  assume  the  fact  to  be  that  neither  the  President  nor  his  two 
special  secretaries,  the  intimate  friends  and  messmates  of  Colonel  Leet, 
had  any  knowledge  whatever  of  his  connection  with  the  general  order, 
whether  derived  from  Leet  or  Murphy,  or  from  guy  other  source — yet  this 
ignorance  could  not  by  any  possibility  have  been  prolonged  later  than  3d 
March,  1871,  when  the  testimony  taken  by  the  Patterson  committee,  and 
contained  in  Senate  Keport  380,  Forty-first  Congress,  third  session,  was 
published  to  the  world,  and  became  the  subject  of  congressional  debate. 
The  testimony  so  taken  and  published  disclosed  the  relations  of  Leet 
&  Stocking  to  the  general-order  business  to  the  same  effect,  if  not 
quite  so  fully,  as  does  the  testimony  now  under  consideration.  And  yet 
the  insurmountable  fact  stands  that,  with  full  knowledge  of  the  effect  of 
his  letter  of  introduction  of  Leet  to  Grinnell,  and  of  his  connection  with 
the  general  order,  and  the  abuse  of  his  position ;  despite  the  fact  that  Mr. 
A.  T.  Stewart  twice  took  the  pains  (volume  1,  pages  115, 116)  to  give  the 
President  full  information  of  the  condition  of  affairs,  yet  not  one  step 
was  taken,  no  real  word  uttered  by  the  President  to  remove  a  person  who, 
it  is  alleged,  had  deceived  and  disobeyed  him,  and  who,  under  the  cover 
of  his  sole  personal  recommendation,  had  wrought  such  injury  to  the 
merchants  of  New  York,  and  brought  scandal  and  disgrace  upon  the 
public  service.  Who  will  deny  that  Leet  &  Stocking  could  have  had 
the  general-order  privilege  withdrawn  from  them  at  the  wrord  of  the 
President!  The  influence  that  upheld  them,  therefore,  is  no  longer  a 
“  mystery.”  Nor  is  it  to  be  wondered,  that  although  the  present  collector, 
Arthur,  has  at  last,  in  accordance  with  the  instructions  of  the  Secretary 
of  the  Treasury,  broken  up  the  monopoly  and  otherwise  measurably  re¬ 
formed  the  general-order  system  in  New  York,  yet  that  Leet  &  Stock¬ 
ing  are  to  this  hour  in  the  enjoyment  of  a  very  large  and  lucrative  por¬ 
tion  of  the  general-order  business. 

THE  “MYSTERY”  CLEARED  UP. 

Indeed,  the  more  we  consider  the  facts  the  less  “mystery”  is  there  as 
to  the  “power”  that  alone  upheld  them  and  their  exactions  throughout. 

Twice,  one  hundred  of  the  largest  importing  and  banking  houses  of 
New  York  remonstrated  against  the  new  general-order  system,  first  to 
Collector  Grinnell  and  next  to  Collector  Murphy. 

As  early  as  May,  1870,  Messrs.  Robinson  and  Evans,  the  commis¬ 
sioners  appointed  by  the  Secretary  of  the  Treasury,  reported  in  favor 
of  the  restoration  of  the  old  general-order  system.  (House  Ex.  Doc.  313, 
41st  Cong.,  2d  sess.,  pp.  23,  24.) 

Twice,  Mr.  A.  T.  Stewart,  of  New  York,  personally  called  the  Presi¬ 
dent/s  attention  to  the  subject  and  the  strong  necessity  of  reform — once 
in  October,  1870,  and  again  in  the  summer  of  1871.  In  this  great  mer¬ 
chant  the  President  had  such  confidence  that,  in  forming  his  cabinet,  in 
March,  1869,  he  selected  him  as  his  Secretary  of  the  Treasury. 

Mr.  Stewart  also  spoke  to  Collector  Murphy  on  the  same  subject,  and 
urged  on  him  the  fine  opportunity  presented  to  him.  (Yol.  1,  p  116.) 

Early  in  1871  the  joint  select  committee  of  both  houses  of  Congress 
investigated  the  general  order  at  New  York,  and,  by  a  mass  of  tes¬ 
timony  from  the  most  eminent  merchants  and  business  men,  exposed 


Lxxym 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


to  Congress  and  tlie  country  the  enormity  of  the  system  in  the  hands 
of  Leet  and  his  associates,  and  the  means  by  which  he  got  hold  of  a 
monopoly  so  oppressive.  This  exposure  was  but  the  expression,  in  its 
most  authoritative  form,  of  the  all  but  unanimous  voice  of  the  com¬ 
munity  and  press  of  New  York. 

Twice  the  Secretary  of  the  Treasury,  evidently  much  impressed  by 
the  remonstrances  of  the  commercial  community  of  New  York,  and  by 
the  concurrent  testimony  of  his  own  commission,  wrote  to  Collector 
Grinnell  on  June  1, 1870,  and  again  on  June  9,  1870,  urging  the  same 
views  on  him.  See  these  letters  at  the  end  of  this  report. 

A  third  time  the  Secretary  wrote  to  Collector  Murphy  to  the  same 
effect. 

Yet  nothing  was  done  at  Washington  for  the  relief  of  the  commerce 
of  New  York.  Nothing  was  done  to  remove  Leet  &  Stocking  from 
the  position  they  so  grossly  abused.  Nothing  was  done  to  break  up 
their  monopoly,  before  unheard  of  in  New  York,  or  even  to  reduce 
their  extortionate  charges. 

In  spite  of  everything,  Leet  and  his  associates  held  their  ground. 
They  maintained  themselves  and  their  exorbitant  monopoly  in  defiance 
of  the  merchants  of  New  York;  of  the  press  and  public  of  New  York; 
of  the  joint  select  committee  of  Congress  in  1871;  in  defiance  even 
of  the  Secretary  of  the  Treasury  himself;  in  defiance  of  public  exposure 
and  public  decency. 

Nay,  at  this  hour,  notwithstanding  a  “reform77  of  the  whole  general- 
order  system,  they  are  able  to  maintain  themselves  in  an  important 
share  of  the  best  business,  publicly  enjoyed  by  them,  besides  whatever 
private  interest  they  may  share  with  others. 

What,  then,  is  the  “power77  which  has  so  sustained  and  upheld  Leet  & 
Co.,  even  to  this  moment?  Where  in  the  Government  is  the  “power77 
which  is  stronger  than  the  merchants,  the  people,  and  the  press  of 
New  York;  stronger  than  the  two  investigating  committees  of  1871  and 
1872;  stronger  even  than  the  Secretary  of  the  Treasury;  and  so  much 
stronger  than  each  and  all  of  these  as  to  defeat  them  one  and  all  with¬ 
out  an  effort  ? 

To  this  question  there  can  be  but  one  answer,  and  that  so  very  plain 
as  to  leave  no  “mystery77  whatever  about  the  matter. 

II. 

The  second  head  is  as  follows : 

And  that  said  committee  farther  inquire  whether  any  person  holding  office  in  the 
custom-house  at  New  York  has  been  detected  in  or  is  known  or  believed  by  his  superior 
officer  to  have  been  guilty  of  bribery  or  of  taking  bribes,  or  of  other  crime  or  misde¬ 
meanor. 

And,  also,  whether  there  have  been  or  are  officers  of  the  custom-house  conniving  at 
frauds  or  irregular  practices  in  passing  the  baggage  of  travelers  arriving  in  the  port 
of  New  York. 

TAKING  OF  BRIBES  BY  OFFICERS  OF  THE  CUSTOM-HOUSE. 

By  the  act  of  March  3,  1863,  (Stats,  at  Large,  volume  12,  page  739,) 
it  is  provided,  “  if  any  officer  of  the  revenue  shall  accept  from  any  per¬ 
son  engaged  in  the  importation  of  goods,  wares,  or  merchandise,  into 
the  United  States,  any  fee,  gratuity,  or  emolument  whatsoever,  such 
officer  shall,  on  conviction  thereof,  be  removed  from  office,  and  fined,77  &c. 
And  “  any  person  engaged  in  the  importation  of  goods,  &c.,  into  the 
United  States  who  shall  make  or  offer  to  make  to  any  officer  of  the  revenue 
any  gratuity  or  present  of  any  money  or  other  thing  of  value,  such  person 
shall,  on  conviction  thereof,  be  fined,  &c.,  ordmprisoned,77  &c. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LXXIX 


And  by  the  law  of  July  18, 1866,  (Stats,  at  Large,  volume  14,  page  185,) 
u  every  officer  or  person  connected  with  the  customs  or  internal  revenue  ser¬ 
vice,  as  a  prerequisite  for  the  payment  to  them  of  any  payment  for  salary,  is 
required  to  make  and  subscribe  an  oath  that,  during  the  period  for  which 
he  or  she  is  to  receive  pay  for  salary,  neither  lie  nor  she  nor  any 
member  of  his  or  her  family  has  received,  either  personally  or  by  the 
intervention  of  another  party  any  money,  or  compensation  of  any  de¬ 
scription  whatever,  nor  any  promises  for  the  same  either  directly  or  indi¬ 
rectly  for  services,  &c.,  in  connection  with  the  custom s,”  &c. 

On  this  subject  we  apprehend  there  can  be  very  little  doubt  of  the 
constant  and  regular  violation  of  the  foregoing  provisions  of  law  by  the 
officials. 

In  the  testimony  taken  before  the  Senate  committee,  of  which  Mr. 
Patterson  was  chairman,  in  1871,  will  be  found  the  depositions  of  over  a 
half  score  inspectors,  weighers,  &c.,  to  this  effect.  See  the  testimony 
of  the  following,  among  others :  Freeman,  Report,  pages  40,  41, 42,  43  ; 
Hopps,  68,  69;  Eaton,  71;  Rabineau,  73,  74;  Cooke,  75,  76 ;  Hamilton, 
76,  77  ;  Young,  121 ;  Dinglestedt,  as  to  entry  clerks,  135  ;  A.  B.  Cornell, 
as  to  weighers,  141,  143-4 ;  Levy,  148,  149.  In  the  course  of  the  exami¬ 
nation  it  was  stated  by  the  chairman,  Mr.  Patterson,  that  u  with  one 
exception  all  of  the  custom-house  inspectors  who  had  been  before  the 
committee,  had  testified  they  were  in  the  habit  of  taking  bribes  for  the 
discharge  of  steamers.”  Report,  page  154. 

What  is  worse  than  even  the  taking  of  bribes  by  officials  is  that  reg- 
larly  every  month  they  take  the  stringent  oath  prescribed  by  the  act  of 
1866.  Can  anything  illustrate  more  vividly  the  utter  demoralization  of 
the  customs-service  at  IsTew  York? 

At  volume  2,  page  389,  of  the  present  testimony  will  be  found  the 
deposition  of  Mr.  James  H.  Young,  an  inspector,  which  fully  exposes 
the  violations  of  law  by  inspectors  of  customs. 

By  Mr.  Casserly  : 

Q.  You  have  been,  as  you  stated,  giving  attention  to  the  condition  of  the  customs- 
service.  Can  you  speak  as  to  the  practice  of  the  steamship  companies  of  paying 
money  to  the  discharging  officers? — A.  A  practice  has  existed  for  the  last  twenty  years 
on  the  part  of  steamship  companies  of  paying  what  is  called  house-money. 

Q.  Tell  us  about  that. — A.  For  instance,  a  steamer  comes  in  here  this  morning.  A 
portion  of  her  permits  will  get  in  this  afternoon.  She  will  not  commence  to  discharge 
to-day  unless  they  are  very  much  in  a  hurry,  when,  if  not  discovered  by  the  inspector, 
the  first  thing  you  know  is,  you  see  the  goods  rushed  in  upon  you.  There  is  no  moral 
or  physical  power  that  I  have  seen,  hut  once,  in  that  custom-house  to  prevent  any  such 
state  of  things.  If  the  inspector  at  sundown  leaves  the  steamship  wharf,  and  leaves 
this  mass  of  permits  and  orders  lying  there  on  his  books  without  being  entered,  and 
goes  home,  the  next  morning  the  steamer  could  not  go  to  work  for  three  or  four  hours 
in  the  morning.  If  he  stays  there  at  night  and  enters  these  permits  and  orders,  and 
makes  out  his  public-store  ticket  and  his  warehouse  tickets,  and  gets  his  books  in 
proper  order  to  discharge  the  steamer,  it  will  probably  take  him  two  or  three  hours  to 
do  that  every  evening. 

Q.  Two  or  three  hours  every  evening  ? — A.  Yes,  sir ;  they  can’t  get  through  before 
that.  When  a  person  has  been  discharging  a  cargo  of  from  one  thousand  to  two  thou¬ 
sand  packages,  coming  rapidly  out  of  the  steamship,  brokers  are  coming  continually, 
and  others  in  the  same  way,  and  we  have  to  answer  their  questions  and  the  questions 
of  merchants’  clerks  (we  never  see  the  merchants)  which  are  continually  being 
asked.  One  man  inquires  in  regard  to  a  certain  package,  and  whether  his  good§  are 
going  to  general  order,  &c.  At  night,  when  you  get  through,  you  will  find  that  you 
have  a  number  of  permits  there  that  are  not  entered,  and  a  number  of  orders  that  are 
not  entered,  and  that  your  books  are  not  in  a  condition  to  leave  them,  so  that  you  can 
commence  the  next  morning  at  sunrise  to  discharge  your  ship  ;  and  it  is  necessary  for 
an  officer,  who  has  any  care  in  his  position,  or  who  cares  for  the  honor  of  his  position, 
or  anything  for  the  estimate  of  his  friends,  to  remain  there  and  get  his  books  in  such 
a  condition  that  ho  will  be  ready  to  discharge  his  ship  the  next  morning.  For  such 
services  there  has  been  paid  what  lias  been  called  house-money.  That  the  steamship 
company  pays  ;  sometimes  paying  less  and  sometimes  more.  Every  inspector  in  the 


LXXX 


NEW  YORK  CUSTOM  HOUSE  INVESTIGATION. 


department  who  has  ever  discharged  a  steamer  has  received  this  house-money,  which 
is  paid  for  services  after  his  duties  to  the  United  States  have  entirely  ceased.  They 
cease  at  sunset. 

Q.  You  stated  that  the  steamship  companies  pay  this  money  ;  can  you  state  what 
each  of  the  lines  pays  ? — A.  Yes,  sir  ;  the  National  Steamship  Company,  that  require 
more  favors  than  anybody  else,  pay  least — $15. 

Q.  What  does  the  Cunard  line  pay  ? — A.  Twelve  dollars.  The  Inman  line  pays  $20 
or  $25,  according  to  the  services  performed.  The  German  lines  pay  $20  regularly. 

Q.  Is  there  any  difference  between  the  Bremen  and  Hamburg  lines  ? — A.  Not  the 
least.  I  think  there  is  a  difference  in  regard  to  the  perquisites  that  are  received.  For 
instance,  we  are  entitled,  according  to  the  regulations  of  those  steamers,  to  rations  of 
liquors.  Those  rations  of  liquor  are  regularly  served.  Mr.  Schwab  made  a  mistake  in 
his  testimony  when  he  said  that  the  officers  were  served  with  three  bottles  of  liquor  a 
day.  It  is  not  so.  I  have  been  only  once  in  his  department.  There  are  three  bottles 
of  liquor  served  for  two  officers,  and  not  three  apiece ;  a  bottle  of  gin,  a  bottle  of 
sherry,  and  a  bottle  of  very  poor  brandy.  The  liquors  are  better  for  washing  purposes 
than  for  drinking. 

Q.  That  is  daily  ? — A.  That  is  the  daily  ration  which  is  put  up  for  us  when  we  leave 
the  ship.  It  is  sent  out  in  a  case.  The  same  ration  is  received  by  Mr.  Van  Buskirk, 
the  chief  of  the  barge-office,  and  is  taken  by  Mr.  Anderson  to  his  house. 

Q.  For  each  ship  ? — A.  Yes,  sir. 

Q.  Mr.  Van  Buskirk  must  receive  quite  a  considerable  amount  of  liquor  in  the  course 
of  a  year  ? — A.  He  has  been  forty-two  years  in  this  department,  and  I  think  he  must 
have  a  very  good  stock  on  hand  by  this  time. 

*  *  *****  * 

Again,  at  page  392,  the  same  witness  says : 

Q.  What  is  Major  Burton’s  full  name  ? — A.  I  don’t  know  his  full  name.  He  is  the 
deputy  surveyor  for  the  examination  of  inspectors.  He  doesn’t  assign  the  inspectors 
to  the  examination  of  baggage.  That  is  done  by  Mr.  Vau  Buskirk.  I  have  heard  a 
great  deal  of  report  and  rumor  in  regard  to  moneys  paid  by  inspectors  for  the  examina¬ 
tion  of  baggage. 

Q.  Paid  by  inspectors? — A.  No,  sir;  paid  to  inspectors  for  the  examination  of  bag¬ 
gage.  I  have  never  known  of  an  instance  of  it.  I  have  never  been  approached  myself 
in  that  way,  but  I  can  readily  understand  that  a  gentleman  coming  on  a  steamship, 
with  a  lAdy,  his  wife  and  family,  who  have  been  to  Europe,  where  he  might  have  bag¬ 
gage,  dresses  that  are  made  up,  nothing  dutiable.  This  baggage  is  packed  by  packers 
in  Paris,  and  the  wardrobe  may  be  worth  $20,000.  The  inspector  can  examine  that  by 
running  his  hand  under  the  dresses  without  taking  them  out  and  soiling  them.  A 
gentleman,  under  such  circumstances,  might  pay  an  inspector  for  not  handling  them 
roughly.  I  can  understand  that  things  may  have  been  done,  but  I  don’t  know  of  my 
own  personal  knowledge.  I  know  this,  that  a  man  by  the  name  of  Davis,  a  custom¬ 
house  broker,  has  been,  ever  since  I  have  been  in  the  department,  on  all  the  important 
steamship  docks  wheie  all  the  valuable  baggage  arrives.  I  take  the  Cunard  line  and  I 
take  the  French  line,  where  the  lines  of  steamers  come  in  on  which  our  wealthy  citizens 
generally  come.  This  man  Davis  Las  appeared  to  have  a  control,  even  superior  to  the 
surveyor’s  deputy  in  charge  of  the  dock,  in  regard  to  the  examination  of  baggage. 

Q.  By  the  officers? — A.  Yes,  sir;  I  have  heard  him  use  very  coarse  language  about 
baggage  which  he  is  supposed  to  have  the  control  of.  I  have  heard  it  stated,  and  it 
was  stated  to  me  this  morning  by  an  inspector,  who  was  appointed  here  through  the 
influence  of  Senator  Patterson,  of  the  same  name  as  myself,  that  gentlemen  have  said 
to  him  that  this  man  Davis  has  had  their  baggage  passed  for  a  consideration,  and  that 
they  have  paid  Davis  frequently.  I  know  there  has  been  a  dread  on  the  part  ot 
inspectors  in  regard  to  the  influence  which  might  be  brought  against  them  bjr  Davis, 
Always,  since  I  have  been  in  the  department,  there  seems  to  be  an  influence  thrown 
around  him  which  protected  him  on  steamship  wharves,  and,  while  he  didn’t  examine 
baggage,  it  was  a  settled  matter  that  an  inspector  who  examined  baggage  that  he  had 
anything  to  do  with  must  pass  it  or  lose  his  place. 

Q.  What  is  Davis’s  name  ? — A.  James  Davis,  I  believe. 

Q.  You  spoke  of  his  having  an  influence  in  what  quarter? — A.  I  can’t  tell ;  it  is  an 
influence  that  some  people  say  comes  from  Washington,  and  some  from  the  collector. 
He  certainly  was  there  when  Mr.  Smythe  was  there,  and  certainly  when  Mr.  Griunell 

was  there,  and  also  when  Mr.  Murphy  was  there. 

*  ******* 

On  the  same  point,  at  volume  2,  page  602,  another  witness  speaks: 

M.  C.  Gasper  sworn  and  examined. 

By  the  Chairman: 

Question.  What  is  your  business ?— Answer.  I  have  been  connected  with  Howland 
&  Aspinwall  since  1862. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LXXXI 


Q.  What  is  your  particular  business? — A.  It  is  supervising  steamers  and  vessels; 
attending  to  the  sales  of  merchandise  purchases. 

Q.  Are  you  familiar  with  the  discharge  of  goods  which  are  imported  by  Howland  & 
Aspinwall  ? — A.  Yes,  sir. 

Q.  In  the  manner  in  which  they  get  through  the  custom-house,  &c. ;  do  you  know  - 
what  has  been  done  with  the  payments  of  money  to  secure  facilities  for  the  landing  of 
goods  ? — A.  We  have  been  in  the  habit,  since  1863,  of  paying  inspectors. 

Q.  Paying  what? — A.  Paying  inspectors  that  were  sent  from  the  custom-house  to  our 
steamers. 

Q.  What  have  you  paid  them  for? — A.  For  what  purpose? 

Q.  Yes,  sir. — A.  Well,  for  ov<  rwork,  and  as  an  incentive  to  application  ;  the  duties 
with  which  they  were  charged  there  being  somewhat  onerous  and  somewhat  difficult, 
requires  closer  application  than  Government  officials  generally  give  to  such  things. 

Q.  Were  they  not  under  obligations,  as  Government  officials,  to  give  full  attention  to 
the  duties  which  are  necessary  in  order  to  facilitate  the  landing  of  goods? — A.  I  sup¬ 
pose  they  were,  sir. 

Q.  Did  they  fail  in  that? — A.  We  have  often  obliged  them  to  work  nights,  al¬ 
though — 

Q.  Did  any  of  them  fail  in  performing  their  duty,  so  as  to  give  you  the  ordinary 
facilities? — A.  Well,  I  can’t  say  they  have,  sir. 

Q.  You  don’t  know  of  any  instance  in  which  they  have?— A.  No,  sir;  I  can’t  recall 
an  instance. 

Q.  But  still  you  gave  them  money  ? — A.  Yes,  sir. 

Q.  How  much  have  yon  been  in  the  habit  of  giving  them? — A.  From  $10  to  $50  for 
each  officer. 

Q.  From  $10  to  $50,  for  what  services? — A.  For  night-work  or  for  overwork. 

Q.  Ten  to  fifty  dollars  for  overwork  on  any  particular  ship  ? — A.  On  a  particular 
ship,  yes,  sir;  there  are  two  inspectors  assigned  to  a  ship  as  it  comes  in. 

Q.  Can  you  name  any  ship  on  which  you  paid  either  of  these  sums? — A.  Well,  sir,  I 
should  be  obliged  to  name  almost  every  steamer  we  have  ever  had  since  1863.  There 
was  at  one  time — Mr.  Grinnell,  I  believe  it  was,  issued  a  circular  orderiug  agents  of 
steamships  not  to  pay  officers,  under  penalties.  It  was  discontinued. 

Q.  But  you  have  been  in  the  habit  of  paying  for  the  unloading  of  almost  every 
steamer? — A.  Yes,  sir;  with  the  exception  of  that  time. 

Q.  Now,  can  you  tell  the  name  of  inspectors  who  received  this  money? — A.  I  don’t 
know  the  name  of  a  single  one  of  them,  sir. 

Q.  You  know  some  of  them,  do  you  not? — A.  I  would  recognize  some  of  them,  I  sup¬ 
pose,  to  meet  them. 

Q.  And  have  you  been  in  the  habit  of  paying  so  much  money,  and  yet  not  knowing 
the  names  of  the  persons  who  received  it  ? — A.  Yes,  sir. 

Q.  Have  you  paid  it  to  any  other  officer  of  the  customs  besides  inspectors? — A.  No, 
sir. 

Q.  This  has  been  a  common  practice  with  you  and  your  firm,  I  understand — the 
firm  you  are  with  ? — A.  Yes,  sir. 

Q.  Do  you  know  whether  it  is  so  with  other  firms  ? — A.  I  believe  it  is,  sir. 

Q.  You  think  it  is  ? — A.  Well,  they  have  told  me  that  it  was  because  the  matter  has 
often  been  canvassed.  As  I  said,  it  was  about  until  a  circular  was  issued  by  Mr.  Grin¬ 
nell. 

By  Mr.  Casserly  : 

Q.  In  what  year,  sir? — A.  I  should  think  that  was  three  years  since.  It  was  discon¬ 
tinued  for  awhile,  and  soon  afterward,  when  night  permits  were  granted,  bills  were 
rendered  regularly  from  the  custom-house  for  those  over-services  for  which  we  had 
been  paying  different. 

By  the  Chairman  : 

Q.  That  was  for  night  service  ? — A.  For  night  service;  yes,  sir. 

Q.  Have  you  had  regular  bills  for  other  than  night  service  ? — A.  No,  sir. 

Q.  Merely  yon  put  money  in  their  hands  without  receipt  or  anything  of  the  kind? 

A.  They  came  to  the  office  just  after  the  steamer  was  discharged  and  gone  away,  gen¬ 
erally  the  next  day,  and  there  they  got  their  money. 

Q.  The  inspectors  ? — A.  The  inspectors;  yes,  sir. 

Q.  But  you  don’t  know  whether,  in  consequence  of  this  even,  they  rendered  you  any 
extra  facilities? — A.  They  did  if  they  worked  at  night — if  they  worked  all  night,  as 
they  often  did. 

Q.  But  when  they  didn’t  work  at  night  ? — A.  No,  sir,  I  don’t  know  as  they  did. 

By  Mr.  Bayard  : 

Q.  You  say  this  has  been  the  invariable  practice  sinco  1863  ? — A.  Since  I  have  been 
in  that  house. 

Q.  And  this  you  believe  to  be  the  system  in  the  port  of  New  York? — A.  Yes,  sir. 


LXXXII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Q.  Do  you  know  of  any  steamship  line  that  is  an  exception  to  this  rule? — A.  No,  sir, 
I  don’t.  I  have  talked  with  all  of  them  repeatedly.  We  have  canvassed  them  to¬ 
gether. 

Q.  Such  is  the  testimony  before  us.  You  say  the  rates  per  man  run  from  $10  to 
$50  ?— A.  Yes,  sir. 

Q.  The  house  of  Howland  &  Aspinwall  is,  I  believe,  one  of  the  oldest  and  most  dis¬ 
tinguished  in  this  city,  is  it  not,  sir? — A.  Yes,  sir. 

Q.  One  of  the  most  extensive  in  their  trade  ? — A.  Yes,  sir. 

We  might  cite  to  the  same  effect  the  testimony  of  the  proprietors  or 
agents  of  every  steamship  line  at  the  port  of  New  York — the  testimony 
of  John  S.  Wiliiams,  of  Messrs.  Williams  &  Guion,  volume  1,  pages  599 
and  600,  and  again,  pages  668, 669,  670 ;  of  Mr.  Francklyn,  of  the  Canard 
line,  at  page  516;  of  Mr.  Schwab,  of  the  Bremen  line,  at  pages  245  and 
246,  and  of  many  others,  all  going  to  show  that  these  laws,  by  the  prac¬ 
tice  of  custom-house  inspectors  at  New  York,  are  “more  honored  in  the 
breach  than  in  the  observance.” 

It  does  not  lessen  the  value  of  this  mass  of  testimony  as  to  the  prac¬ 
tice  on  the  part  of  the  steamship  lines  to  give  the  custom-house  officers 
bribes  in  money  and  liquors,  that  it  was  given  unwillingly. 

Thus  when  Mr.  Williams,  of  Williams  &  Guion,  was  lirst  called,  he 
disclosed  little  or  nothing.  When  recalled,  pages  668-70,  he  made  a  full 
disclosure,  as  follows : 

John  S.  Williams,  a  witness,  being  recalled,  further  testifies. 

By  Mr.  Casserly  : 

Question.  Do  you  wish  to  state  anything  this  morning  on  the  subject  of  the  moneys 
paid  to  inspectors  by  steamship  lines  to  which  your  attention  was  directed  yester¬ 
day  ? — Answer.  In  regard  to  your  inquiries  as  to  what  moneys  were  paid  to  customs 
officers,  I  have  made  aD  investigation,  and  I  find  the  rule  is,  that  where  officers  perform 
extra  duties,  we,  as  a  rule,  make  them  a  present  of  something  after  the  ship  is  dis¬ 
charged  and  the  work  is  done.  It  is  gratuity,  amounting  sometimes  to  $10,  $15,  or 
$20.  It  is  given  simply  for  extra  work.  We  do  not  look  upon  it  in  the  light  of  bribery 
by  any  means  at  all.  There  is  often  night-work  to  be  done.  There  was  a  case  this 
week  in  which  two  officers  worked  till  12  o’clock  at  night  in  copying  the  permits  ;  that 
was  of  great  service  to  us  as  well  as  to  the  merchants. 

By  Mr.  Casserly  : 

Q.  You  say  you  have  spoken  of  it  freqently  to  several  collectors? — A.  Yes,  sir. 

By  Mr.  Stewart  : 

Q.  What  collectors?— A.  I  spoke  more  particularly  recently  to  Collector  Grinnell. 

Q.  What  did  he  say  about  it  ? — A.  He  said  it  must  be  stopped;  that  they  could  not 
do  it,  and  he  issued  an  order  to  that  effect,  that  they  must  not  do  it. 

By  Mr.  Casserly  : 

Q.  Do  you  know  that  anybody  has  really  and  earnestly  tried  to  suppressJhis  prac¬ 
tice  ? — A.  I  do  not. 

Q.  I  understand  you  to  say  that,  in  your  steamship  line,  after  the  officer  has  dis¬ 
charged  the  ship,  the  practice  is,  if  he  has  done  well,  to  give  him  $10,  or  if  he  has  been 
very  useful  to  give  him  $20  ? — A.  Yes,  sir.  What  I  mean  by  that  is  this :  if  he  has 
attended  to  his  duty  and  has  not  put  any  hinderance  in  the  way  of  discharging,  but, 
on  the  contrary,  has  helped  along  the  work  an  hour  or  two,  or  two  or  three  hours,  we 
give  him  a  gratuity. 

Q.  I  understand  you  to  say  that  has  been  the  practice  for  a  great  many  years  ? — A. 
Yes,  sir;  perhaps  the  fees  are  rather  larger  than  they  were  twenty-five  years  ago. 

Q.  You  have  spoken  of  extra  service  in  copying  permits,  and  you  gave  a  recent  case 
in  reference  to  your  own  ship  the  Colorado  ? — A.  Yes,  sir. 

Q.  What  is  the  reason  that  you  cannot  furnish  a  clerk  to  do  the  copying  of  these  per¬ 
mits,  aud  help  the  inspector  to  verify  the  permits  ? — A.  I  suppose  it  might  be  done,  but 
that  would  be  duty,  I  believe,  entirely  to  the  Government. 

Q.  And  it  would  not  be  quite  so  satisfactory  to  the  inspector? — A.  I  suppose  not. 
We  have  a  book  similar  to  the  inspector’s  that  we  copy  from  the  bills  of  lading.  He 
makes  his  up  from  the  permits. 

Q.  Of  course,  you  are  largely  dependent  upon  the  good  will  of  the  inspector  for  the 
prompt  discharge  of  your  ship  ? — A.  They  have  the  means  of  retarding  us  very  much 
indeed. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LXXXIII 


Q.  Without  appearing  much  to  violate  their  duty  ? — A.  O,  yes,  sir;  a  man  might  do 
a  job  in  copying  permits  in  an  hour,  or  he  might  take  three  hours,  and,  perhaps,  we 
could  not  find  any  fault  with  him. 

Q.  Do  you  understand  that  the  same  practice  which  you  have  described  with  refer¬ 
ence  to  your  own  line  prevails  with  the  other  steamship  lines  ? — A.  I  do,  with  several ' 
of  them,  I  am  almost  certain. 

Q.  Money  is  used  ? — A.  Yes,  sir. 

Q.  By  those  that  are  most  hurried  ?— A.  Yes,  sir. 

Q.  The  Inman  line  for  instance  ? — A.  Yes,  sir. 

Q.  You  spoke  to  Mr.  Grinnell  once  about  it.  Did  you  speak  to  him  oftener  than 
once  ? — A.  I  think  I  have  had  as  many  as  three  conversations. 

Q.  You  know  him  very  well,  being  an  old  merchant  here  yourself? — A.  Yes,  sir. 

Q.  And  he  said,  of  course,  that  it  was  all  wrong,  and  that  it  must  be  stopped? — A. 
Yes,  sir. 

Q.  Did  he  stop  it  ? — A.  Hedssued  a  proclamation  directing  that  none  should  be  paid 
on  any  condition  whatever. 

Q.  And  the  practice  was  not  stopped? — A.  I  judge  not,  as  far  as  my  knowledge 
goes — not  entirely,  at  any  rate. 

Mr.  G.  Schwab,  of  Oelrichs  &  Co.,  agents  of  the  Bremen  line  of 
steamships,  testified  (volume  2,  pages  240,  241,  242,  &c.)  as  follows : 

By  Mr.  Casserley  : 

Q.  State  upon  what  ground  these  moneys  are  paid  to  the  inspectors. — A.  If  you  will 
permit  me,  I  will  mention  that  the  practice  of  paying  gratuities  to  custom-house  in¬ 
spectors  for  discharging  vessels  is  by  no  means  anew  one.  *  *  It  is  not  unknown  in 
the  custom-house;  for  about  three  years  ago,  I  think,  in  the  spring  of  1869,  a  gentleman 
from  Washington,  who  represented  himself  as  a  special  agent  of  the  Treasury,  called 
upon  us,  and  on  other  steamship  agents,  for  the  purpose  of  collecting  information  on 
that  very  subject.  I  stated  to  him  what  our  practice  had  been,  and  he  mentioned 
that  the  Secretary  of  the  Treasury  was  desirous  of  suppressing  it.  Some  time  after¬ 
ward  the  collector  or  surveyor — I  am  not  sure  which,  but  I  think  it  was  the  collector — 
issued  a  circular  informing  the  agents  of  vessels  that  the  practice  was  illegal  and  that  it 
must  be  discontinued.  We  then  ceased  to  pay  those  gratuities  ourselves,  but  I  be¬ 
lieve,  and  in  fact  I  know,  that  the  custom-house  inspectors  have  continued  to  receive 
them,  and  do  receive  them  to  this  day.  *  *  As  a  matter  of  fact,  I  can  state,  I  think, 

that  none  of  the  steamers  of  our  line  have  ever  discharged  cargoes  at  this  port  that  have 
not  paid  a  gratuity  of  some  kind  to  the  custom-house  officer  in  attendance  ;  and  I  be¬ 
lieve  that  no  steamer  has  ever  left  this  port  that  has  escaped  this  tax,  or  that  has  not 
violated  in  some  way  the  laws  and  regulations,  with  the  consent  of  the  custom-house 
officers ;  and  that,  in  a  large  measure,  is  what  the  gratuity  is  paid  for  ;  not  that  the 
revenue  has  been  defrauded,  or  anything  wrong  has  been  done,  but  where  the  laws 
operate  harshly  upon  the  ship-owners,  the  custom-house  officer  exercises  his  discretion 
and  allows  things  which  are,  strictly  speaking,  against  the  letter  of  the  law. 

Q.  When  you  say  “  no  steamers,”  you  mean  no  steamers  plying  to  a  European  port  ? 
— A.  No,  sir  ;  I  believe  no  steamers  whatever. 

Q.  No  sea-going  steamers  ? — A.  No  sea-going  steamers  to  a  foreign  port  coming  un¬ 
der  the  custom-house  regulations.  These  steamers,  nearly  all,  with  a  very7  few  excep¬ 
tions,  leave  on  fixed  and  appointed  days,  which,  of  course,  makes  quick  dispatch  a 
matter  of  absolute  necessity. 

******* 

Q.  You  say  that  the  Secretary  of  the  Treasury  some  time  ago,  I  understand  you, 
issued  a  circular  to  the  steamship  agents  prohibiting  the  payment  of  money  under  the 
circumstances  you  have  described,  to  the  discharging  officer  ? — A.  The  collector  did  it. 
The  Secretary  of  the  Treasury  sent  an  agent  here. 

Q.  The  result  was  that,  although  the  agents  discontinued  the  practice  of  paying 
directly,  yet  the  moneys  continued  to  be  paid  all  the  same  ? — A.  Yes,  sir. 

Q.  The  only  difference  being  that  more  precautions  were  used  to  cover  up  the  trans¬ 
action  ? — A.  Yes,  sir.  Four  or  five  custom-house  inspectors  testified  to  the  fact  before 
Senator  Patterson’s  committee,  and,  as  far  as  I  am  aware,  the  collector  has  taken  no 
further  step  to  stop  the  practice,  except,  perhaps,  to  remove  from  office  those  men  that 
spoke  of  it  before  Senator  Patterson. 

Q.  What  would  be  the  effect  upon  your  line,  for  instance,  if  you  took  steps  to  stop 
the  practice  of  paying  anything  to  the  inspectors  dischargiug  your  ships  ? — A.  The 
difficulty  for  us  lies  here:  Wo,  a  regular  steamship  line,  have  no  time  to  make  experi¬ 
ments.  Wo  could  not  tell  where  it  would  lead  to  if  we  certainly  refused  to  do  that 
thing.  We  have  to  take  the  mails.  We  have  to  take  the  passengers  every  week  on  a 
fixed  day,  and  it  never  would  do  for  those  experiments.  At  least  that  is  the  feeling 
that  we  have. 


LXXXIV 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Q.  What  is  the  effect  of  such  a  system  on  the  morale  of  the  customs  service? 
What  is  the  effect  of  a  system  which  permits  the  inspector  to  accept  moneys  outside 
of  his  regular  compensation  and  in  violation  of  his  oath  which  he  has  to  take  every 
month  ? — A.  I  cannot  but  say  that  it  must  have  a  very  bad  effect  on  the  morale  of  the 
inspectors. 

The  custom  seems  so  prevalent,  and  the  payment  of  money  to 
inspectors  by  ship-owners  and  merchants  as  an  established  practice  to 
obtain  dispatch  in  discharging  vessels,  or  to  keep  goods  from  going 
i under  general  order,  and  for  otherwise  affording  them  facilities,  often 
contrary  to  law,  is  so  abundantly  proven  throughout  by  the  testimony, 
that  it  is  not  deemed  worth  while  to  make  further  special  references. 

ENTRY-CLERKS. 

The  practice  of  taking  bribes  or  moneys  under  one  cover  or  another, 
contrary  to  the  express  terms  of  the  act  of  Congress  and  of  the  oath 
taken  once  a  month  by  the  officials,  is  by  no  means  confined  to  the 
inspectors.  It  prevails  among  the  entry-clerks,  a  large  class  of  impor¬ 
tant  officers,  on  whose  prompt  dispatch  merchants  are  absolutely  de¬ 
pendent.  Besides  the  testimony  taken  before  the  present  committee, 
and  in  part  referred  to  in  these  pages,  we  add  the  explicit  statement  of 
a  well-known  custom-house  broker,  A.  Dinglestedt,  before  the  commit¬ 
tee  of  1871 : 

Q.  Do  you  have  to  pay  the  clerks  anything  extra  ? — A.  Not  exactly.  Sometimes  we 
make  them  a  present  or  they  borrow  money  from  me.  I  do  not  pay  them  outright.  I 
probably  give  them  $25  or  $30  a  month.  I  think  it  is  a  general  practice  among  brokers, 
as  far  as  I  know.  When  the  clerks  are  there  they  say,  “Lend  me  some  money;”  I 
lend  it  and  they  give  me  some  of  it  back  and  keep  some  of  it ;  so  I  am  constantly  in 
account  with  them.  We  do  not  pay  them  as  payment  for  work  done. 

Q.  Are  there  any  other  class  of  officers  to  whom  you  pay  money  in  this  way? — A. 
Entry-clerks  in  the  naval  office  and  the  warehouse  department;  they  are  all  the  same 
kind  of  entry-clerks. 

EXTORTING  BRIBES. 

Bribes  are  most  commonly  given  by  the  ship  or  the  merchant  under  a 
sort  of  tacit  compulsion,  for  facilities  and  prompt  performance  of  duties 
not  otherwise  obtainable  of  the  officials. 

Such  is  the  demoralization  of  the  custom-house  that  bribes  are  openly 
and  unblusliingly  demanded  under  threats  by  the  officials.  As  an  in¬ 
stance  we  give  the  case  of  an  importation  of  coal  in  December,  1871.  The 
witness  is  Mr.  Rogers,  of  Eddy  &  Rogers,  coal  merchants,  volume  2, 
page  302 : 

By  the  Chairman  : 

Q.  You  say  that  Mr.  W.  O.  Cloyes  is  one  of  the  men  ? — A.  Yes,  sir. 

Q.  What  did  he  say  to  you  ? — A.  The  first  time  I  went  aboard  the  ship  he  asked  me 
what  business  I  had  there.  I  saw  that  he  was  an  officer,  and  I  told  him  that  I  had 
come  to  see  the  cannel-coal,  and  to  see  when  I  could  get  it  out.  He  asked  me  for  my 
permit,  and  I  gave  it  to  him.  He  then,  as  we  went  out  of  the  captain’s  room,  said, 
“  They  have  got  mqre  than  the  bill  of  lading  calls  for  there,  we  know.  We  think  there 
is  more  than  140  tons.  There  are  three  of  us  that  want  some  coal — some  of  this  cancel. 
You  send  us  a  load  apiece  to  our  houses,  and  we  will  make  this  140  tons  come  out  126 
tons,  the  amount  of  your  bill  of  ladiug.”  I  told  him  I  could  not  do  any  such  thing, 
that  I  would  not  think  of  it;  that  we  had  a  weigher  engaged,  and  paid  him  15  cents  a 
ton  to  weigh  and  take  care  of  it.  I,  at  that,  left  him.  Alter  we  got  to  work  on  the 
coal,  he  said  to  me,  at  least  four  times,  about  like  this  :  “  Have  you  concluded  yet  to 
give  us  that  cannel  ?”  At  times  he  would  add,  “  It  is  the  best  thing  you  can  do.”  He 
says,  “  It  don’t  make  any  difference  about  your  weighing ;  we  can  make  out  whatever 
weight  we  please.”  I  always  refused  to  listen  to  this,  of  course.  Then  the  coal  was 
weighed  by  our  weigher ;  there  was  a  ship’s  clerk,  who  was  a  very  careful  man,  by, 
who  checked  the  number  of  loads.  Our  weigher’s  numbers  of  the  loads  agree  with  his. 
He  made  out  126  tons  and  19  cwt.  The  custom-house  officer  returned  the  weight  at 
134  tons  and  16  cwt. ;  I  think  it  was  that.  We  got  a  notice — it  may  be  a  month  after 
the  ship  was  unloaded — from  the  custom-house  to  pay  them  duties  on  about  .8  tons.  I 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LXXXV 


took  no  notice  of  it.  Then  we  were  notified  tlie  second  time  to  pay  tliis,  and  then  I 
wrote  this  letter  to  the  committee. 

Q.  Did  you  pay  the  duty  on  it? — A.  We  have  paid  duty  on  126  tons. 

Q.  You  have  not  paid  on  134  tons  ?— A.  No,  sir. 

Q.  The  collector  did  not  require  it  ?— A.  Yes,  sir ;  we  had  notice  to  pay  this. 

Q.  Who  is  Mr.  Cloyes  ? — A.  He  called  himself  a  custom-house  inspector.  I  suppose 
he  is  a  district  officer.  *  *  *  *  *  ,*  (  * 

Q.  You  supposed  he  was  a  custom-house  officer;  did  he  say  he  was? — A.  Yes,  sir; 
he  took  my  permit. 

Q.  And  claimed  to  he  a  custom-house  officer  ? — A.  Yes,  sir ;  he  had  all  the  permits. 

Q.  Did  you  see  any  of  the  coal  weighed  except  by  the  city  weigher  ? — A.  No,  sir. 

*  Q.  Was  there  any  one  there  to  weigh,  on  the  part  of  the  Government  ? — A.  There  was 
a  Mr.  Muller — I  have  heard  his  name  was — who  claimed  to  have  checked  ten  or  twelve 
tubs,  the  first  that  went,  and  had  figured  on  that  basis. 

Q.  Do  you  know  who  Mr.  Muller  was — what  position  he  occupied  ? — A.  He  repre¬ 
sented  Mr.  James  Thompson,  United  States  weigher. 

Q.  Did  he  say  he  did  to  you  ? — A.  No,  sir.  I  only  heard  from  some  parties  who  I 
thought  knew. 

Q.  What  pier  was  this  ? — A.  Pier  48,  East  River. 

Q.  That  is  in  Mr.  Thompson’s  weighing  district  ? — A.  I  suppose  so. 

Q.  Do  you  know  how  Mr.  Thompson  or  Mr.  Muller  obtained  the  weight  ? — A.  I  have 
heard  that  they  weighed  ten  tubs,  and  called  it  a  certain  weight — I  do  not  know  what — 
and  calculated  on  that  basis. 

Q.  But  you  do  not  know? — A.  No,  sir. 

By  Mr.  Bayard  : 

Q.  Were  you  present  at  the  time  your  coal  was  discharged  ? — A.  A  great  deal  of  it. 
I  was  back  and  forth. 

Q.  How  much  of  your  coal  did  you  see  weighed  by  the  custom-house  weighers? — A. 
I  did  not  see  any. 

Q.  Have  you  any  reason  to  believe  that  any  of  it  was  weighed? — A.  Yes,  sir;  I  be¬ 
lieve  they  weighed  ten  tubs  in  the  first  place,  but  I  didn’t  happen  to  be  there. 

Q.  You  had  it  all  carefully  weighed  by  the  city  weigher  ? — A.  Yes,  sir. 

Q.  I  observe  that  the  custom-house  weight  is  7  per  cent,  more  than  the  city  weigher’s 
weight. — A.  It  figures  nearly  that. 

Q.  When  Cloyes  said,  “Give  us  three  loads  and  we  will  make  the  weight  come  out,” 
what  did  he  mean? — A.  He  meant  the  custom-house  weigher  and  himself  and  Mr. 
Muller. 

Q.  Was  Mr.  Muller  standing  by? — A.  Yes,  sir;  he  was,  and  he  heard  it. 

Q.  What  custom-house  man  was  standing  by  ;  was  Mr.  Thompson? — A.  I  didn’t  see 

him. 

Q.  Who  was  the  weigher  ? — A.  The  private  weigher  of  Briggs  &  Co.,  No.  96  Wall 
street.  He  was  weighing  another  lot  of  coal.  He  heard  that. 

Q.  He  heard  a  demand  on  you  to  give  three  tons  of  coal  and  they  would  bring  the 
weight  down  to  the  amount  on  your  invoice? — A.  I  am  not  sure  that  he  heard  that 
sentence,  but  he  heard  something  that  meant  the  same  thing. 

Q.  Did  the  city  weigher,  who  weighed  your  coal,  hear  any  of  this  proposition  ? — A. 
No,  sir. 

Q.  You  don’t  recollect  any  of  Thompson’s  men  being  present,  except  this  man  Mul¬ 
ler  ? — A.  Muller. 

Q.  He  was  the  only  man  ? — A.  Yes,  sir. 

Q.  Wa*  he  the  foreman  of  that  gang? — A.  He  seemed  to  be  the  only  one. 

Q.  Was  Thompson,  the  United  States  weigher,  on  the  dock  at  all? — A.  No,  sir;  not 
on  the  dock. 

Q.  How  did  they  get  at  the  weight  ?— A.  They  claim  that  they  counted  the  tubs — 
ten  tubs ;  I  do  not  know  whether  they  did  or  not. 

Q.  There  was  no  actual  weighing  by  the  United  States  weigher  of  any  portion  of  the 
invoice? — A.  No,  sir. 

Q.  The  only  weighing  done,  you  say,  was  by  the  city  weigher,  whom  you  employed 
at  15  cents  a  ton  ? — A.  That  is,  except  at  our  own  yard. 

Q.  I  want  to  understand  how  the  interests  of  the  United  States  were  protected.  I 
will  ask  you  whether  there  was  any  actual  weight  taken  by  an  officer  of  the  Govern¬ 
ment  ? — A.  Not  a  pound. 

Q.  You  have  stated  that  there  was  another  invoice  of  coal  brought  on  the  same  ship. 
Tell  us  what  you  know  in  regard  to  the  owner  of  that  invoice  being  approached  in  tho 
same  way. — A.  Mr.  Benedict,  of  New  Haven,  imported  from  the  same  firm — Higginson 
&■  Co. — some  of  the  same  kind  of  coal.  When  he  went  on  board,  the  next  day  after 
I  was  approached  by  these  parties,  they  asked  him  if  he  would  give  them — I  do  not 
know  how  many  tons — of  this  coal,  and  ho  refused.  His  coal  was  also  weighed  by 
another  ©ifcy  weigher  in  the  same  way  I  had  mine,  and  he  claimed  that  there  was  6  per 


LXXXVI 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


cent,  short— that  he  was  charged  6  per  cent,  more  by  the  custom-house  than  what  he 
had. 

Q.  The  custom-house  weights  were  6  per  cent,  in  excess  of  the  coal  he  actually  re¬ 
ceived  ? — A.  Yes,  sir. 

Mr.  Benedict,  a  merchant  of  New  Haven,  above  referred  to,  came  be¬ 
fore  the  committee,  and  testified  in  accordance  with  the  above  facts, 
which  were  otherwise  corroborated  by  documentary  testimony. 

Under  a  theory  of  “defense,”  entertained  by  a  majority  of  the  com¬ 
mittee,  and  usually  acted  on  by  them,  the  two  culprits,  Cloyesand  Du- 
moulin,  were  at  once  summoned.  They  swore  stoutly  in  contradiction 
of  the  facts  stated  by  the  two  merchants ;  but  in  such  a  case  the  true 
weight  of  their  relative  testimony  is  not  difficult  of  ascertainment. 

As  a  specimen  of  a  point-blank  style  of  false  swearing  not  often  met 
with  even  in  the  lowest  criminal  courts,  we  give  a  few  extracts,  (volume 
2,  page  468 :) 

Charles  A.  Du  Moulin  sworn  and  examined. 

By  the  Chairman  : 

Question.  What  is  your  business  ? — Answer.  I  am  employed  by  the  United  States 
weigher,  James  M.  Thompson,  as  an  assistant  weigher. 

By  Mr.  Pratt  : 

*  *  *  *  #  *  * 

Q.  Were  you  present  at  the  time  of  the  landing  of  this  coal  ?— A.  I  was,  sir. 

Q.  Did  I  understand  you  to  say  that  you  were  a  weigher  under  Mr.  Thompson  ? — A. 
Yes,  sir ;  employed  as  an  assistant  weigher. 

Q.  Did  you  weigh  that  coal  ? — A.  I  was  present  at  its  weighing. 

*  *  *  *  *  *  * 

By  Mr.  Pratt  : 

Q.  I  will  ask  you  to  look  at  that  gentleman  sitting  behind  the  bar  and  state  whether 
that  is  Mr.  Rogers  that  you  referred  to. — A.  That  was  the  gentleman  pointed  out  to 
me  as  Mr.  Rogers. 

Q.  I  understand  you  to  say  to  the  committee  that  you  had  no  conversation  with  him 
at  all  ? — A.  To  the  best  of  my  knowledge  and  belief,  I  never  exchanged  a  word  with 
him. 

Q.  I  understand  you  to  say  that  neither  yourself  nor  any  person  within  your  hear¬ 
ing  made  a  proposition  to  Mr.  Rogers  to  deliver  a  load  or  loads  of  coal? — A.  Most 
decidedly,  sir. 

By  Mr.  Bayard  : 

Q.  Did  you  see  a  Mr.  Benedict,  of  New  Haven,  there  ? — A.  I  saw  a  gentleman  pointed 
out  as  such. 

Q.  He  was  there  that  day  ? — A.  He  was,  during  the  delivery  of  this  coal. 

Q.  He  had  an  invoice  of  coal  on  board  of  the  same  ship,  did  he  not  ? — A.  I  believe 
he  did,  sir. 

Q.  You  say  you  made  no  application  to  Mr.  Rogers  to  have  a  load  of  this  coal  sent 
to  you  ? — A.  Emphatically,  I  say  no,  sir. 

Q.  Do  you  say  that  you  made  no  application  to  Mr.  Benedict  to  have  a  load  of  this 
coal  sent  to  you  ? — A.  I  do,  sir. 

Q.  How  near  were  you  standing  to  Mr.  Cloyes,  the  custom-house  officer  ? — A. 
When  ? 

Q.  During  the  time  this  coal  was  being  discharged. — A.  Sometimes  I  was  at  one  end 
of  the  ship  and  he  at  the  other  j  sometimes  we  were  together ;  sometimes  he  was  in 
the  hold  and  I  was  in  the  cabin. 

Q.  You  say  now  that  at  no  time  while  this  ship  was  discharging,  while  you  were 
standing  near  to  Mr.  Cloyes,  that  he  made  the  proposition  to  either  Roberts  or  Bene¬ 
dict  that  he  should  receive  a  portion  of  this  cannel-coal  ? — A.  I  never  heard  any  per¬ 
son,  either  directly  or  indirectly,  approach  either  Mr.  Rogers  or  Mr.  Benedict  in  rela¬ 
tion  to  having  any  coal  sent  to  their  houses  or  given  to  them. 

Q.  No  proposition  of  that  character? — A.  I  never  heard  it,  sir,  directly  or  indi¬ 
rectly. 

Q.  You  kuew  Mr.  Cloyes? — A.  I  never  knew  him  until  that  day  that  he  was  put 
aboard  that  ship. 

Q.  That’s  his  name  ?  He  was  inspector  there  ? — A.  I  am  so  informed,  that  that  is  his 
name. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION.  LXXXVII 


Next  came  Cloyes,  the  custom-house  inspector,  (vol.  2,  p.  472:) 

William  O.  Cloyes  sworn  and  examined. 

By  Mr.  Pratt  : 

Question.  You  may  state  your  name  and  official  position,  if  you  hold  one. — Answer. 
My  name  is  William  O.  Cloyes;  I  am  an  inspector  of  customs,  now  holding  a  position 
in  New  York. 

Q.  How  long  have  you  been  an  inspector? — A.  Since  about  a  year  ago;  I  think  I 
was  appointed  on  the  10th  of  December. 

Q.  Are  you  acquainted  with  a  United  States  weigher  by  the  name  of  James  M. 
Thompson  ? — A.  I  am,  sir. 

Q.  Are  you  acquainted  with  an  employ^  ol  Mr.  Thompson’s,  who  has  just  testified — 
Mr.  Du  Moulin  ? — A.  I  have  seen  the  gentleman.  I  never  saw  him  until  he  came  on 
board  the  Princeton,  to  my  knowledge.  His  name  I  didn’t  know  at  that  time. 

Q.  I  will  ask  you  to  state  to  the  committee  whether  you  superintended  the  dis¬ 
charge  of  the  Princeton. — A.  I  did,  sir. 

*  *  *  *  *  rt  * 

Q.  You  may  state  if  there  was  any  other  person  connected  with  the  discharge  of  the 
cargo  of  that  vessel,  besides  yourself,  whose  name  answers  to  W.  O.  Cloyes  or  Clayes? — 
A.  No,  sir;  there  is  not. 

Q.  You  are  the  same  person  referred  to,  then,  in  this  letter? — A.  I  suppose  I  am,  sir. 

Q.  Do  you  recognize  Mr.  Rogers  in  the  room  at  this  time? — A.  I  recognize  that  gen¬ 
tleman  as  coming  aboard  the  vessel.  I  don’t  know  whether  he  said  his  name  was 
Rogers,  or  who  he  was. 

*  #  h  *  *  * 

Q.  You  say  Rogers  came  down  the  next  day  ? — A.  I  think  he  was  on  board  the  ves¬ 
sel  once  afterward.  His  assignment  of  coal  was  all  put  out  in  about  a  day  and  a  half. 
I  had  no  conversation  with  him  further  than  he  asked  me  how  it  was  getting  along, 
and  I  says,  “  The  coal  is  getting  out  all  right.”  That’s  all  the  conversation  I  had  with 
Mr.  Rogers. 

Q.  Did  you  in  that  conversation,  or  did  any  person  in  your  presence,  make  a  demand 
upon  Mr.  Rogers  for  a  load  of  coal  ? — A.  No,  sir ;  nor  I  never  heard  any  one  else. 

Q.  The  statement  in  his  letter  is :  “  These  men  said  to  me,  ‘  Give  us  three  loads  of 
your  cannel  and  we  will  make  the  weight  come  out  right ;  we  think  you  must  have 
140  tons ;  send  the  cannel  to  our  house’ — giving  street  and  number  that  I  cannot  now 
recollect — *  and  we  will  let  it  go  at  not  over  126  tons.’  ”  You  may  state  whether  you 
used  any  such  language  as  that. — A.  I  swear  positively  I  never  had  no  such  conver¬ 
sation  with  the  gentleman  at  all,  and  that  I  had  no  knowledge  of  the  amount  of  coal 
that  was  aboard  the  ship  other  than  the  face  of  the  permit.  I  think  one  lot  called  for 
126  tons  and  the  other  lot  for  250-odd  tons. 

By  Mr.  Bayard: 

Q.  Did  you  on  that  day  see  Mr.  Benedict,  of  New  Haven  ? — A.  I  don’t  know  the 
gentleman,  sir. 

Q.  Did  you  see  a  gentleman  whom  you  understood  to  be  Benedict,  the  owner  of  the 
coal,  on  board  of  the  ship  that  day  ? — A.  I  saw  a  gentleman  who  came  down  and  had 
some  dispute  relative  to  the  coal,  and  asked  me  permission  to  go  down  between  decks 
to  see  if  there  was  matting  between  the  two  lots.  He  said  that  he  had  bought  it.  I 
don’t  know  his  name. 

Q.  You  don’t  know  his  name  ? — A.  I  don’t  know  his  name ;  no,  sir. 

Q.  Was  Mr.  Rogers  there  at  that  time? — A.  Mr.  Rogers  and  Mr.  Benedict  were  there, 
I  believe,  at  the  time.  I  don’t  know  that  Mr.  Rogers  was  there  at  the  time  that  Mr. 
Benedict,  or  whatever  his  name  was,  asked  me  to  go  down  between  decks,  but  Mr. 
Rogers  came  there  afterward,  and  this  gentleman  tallied  out  several  parts  of  coal 
which  ho  claimed  was  enough  to  make  up  the  lot  belonging  to  Mr.  Rogers. 

Q.  Was  it  the  gentleman  who  claimed  to  be  the  owner  of  the  larger  lot,  and  asked 
your  permission  to  go  between  decks  to  see  whether  it  was  kept  separately  or  not, 
whom  you  understood  to  be  Mr.  Benedict? — A.  Yes,  sir. 

Q.  Now,  I  will  ask  you  if  you  did  not  demand  of  that  gentleman,  whom  you  under¬ 
stood  to  be  Mr.  Benedict,  a  lot  of  his  coal? — A.  No,  sir;  I  swear  positively  that  I  did 
not. 

Q.  Did  you  intimate  to  him  that  if  you  would  get  a  lot  of  that  coal  you  would 
serve  him  in  the  matter  of  its  weight? — A.  No,  sir;  I  didn’t,  because  I  have  nothing 
to  do  with  the  weight  nor  the  returns  of  the  weight. 

Q.  Did  you  make  any  such  demand  upon  him  three  or  four  subsequent  times,  when 
he  was  on  board  of  the  ship? — A.  I  did  not  at  any  time. 

Q.  Did  you  give  him  to  understand  that  unless  your  requirements  were  acceded  to 
he  should  be  mado  to  suffer? — A.  No,  sir;  I  did  not. 

Q.  Did  any  person  in  your  presence  ? — A.  No,  sir ;  not  to  my  knowledge. 


LXXXVIII  NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Q.  Did  any  person  in  yonr  presence  make  any  suck  statement  to  Mr.  Benedict,  the 
person  who  went  down  and  claimed  to  be  the  owner  of  the  coal? — A.  No,  sir;  I  don't 
think  they  did.  I  heard  the  mate  of  the  ship  talking  with  Mr.  Benedict  about  coal, 
but  what  the  conversation  was  I  don’t  know. 

Q.  Was  any  such  statement — any  demand  made  upon  Mr.  Rogers  by  you  ? — A.  No, 
sir ;  there  was  not. 

Q.  Was  any  such  demand  made  by  Mr.  Du  Moulin  upon  Mr.  Rogers? — A.  No,  sir; 
not  in  my  presence  or  to  my  knowledge. 

Q.  Was  there  nothing  at  any  time  said  by  any  one  during  the  discharge  of  that 
vessel  in  regard  to  you  or  Mr.  Du  Moulin,  or  both  of  you  and  a  third  party,  or  a  third 
party,  having  coal  sent  to  them,  or  that  the  owners  should  be  made  to  suffer  in  the 
weight  ? — A.  No,  sir ;  not  to  my  knowledge. 

Q.  You  say  you  saw  a  man  who  was  weighing  there — a  city  weigher — who  weighed 
the  larger  invoice  of  Mr.  Benedict? — A.  I  say  there  was  two  men  there. 

Q.  You  say  you  don’t  know  John  T.  Ward  by  name? — A.  No,  sir;  I  don’t  know  him. 

Q.  Did  you,  ou  this  occasion,  ask  that  weigher  “  who  was  that  stout  man  who  had 
just  left?”  referring  to  the  gentleman  who  had  gone  down  to  examine  the  coal 
between  decks? — A.  I  don’t  think  I  did;  I  might;  I  don’t  know  as  I  did. 

Q.  Did  you  make  the  remark  to  this  weigher,  or  to  either  of  those  men,  in  respect 
of  Mr.  Benedict,  that  he  was  “a  damned  mean  old  cuss;”  that  you  had  tried  to  get 
him  to  give  you  a  load  of  coal,  but  that  he  would  not  do  it? — A.  No,  sir;  I  didn’t.  I 
never  made  any  such  statement  at  all. 

Q.  Did  you  say  that  you  would  get  square  with  him? — A.  No,  sir;  I  did  not,  for  I 
had  no  occasion  to  get  square  with  him.  I  didn’t  know  the  man.  He  had  done 
nothing  to  me  to  get  square  with  him  for. 

Q.  Did  you  turn,  at  that  time,  to  the  stevedore  and  ask  him  if  he  couldn’t  stop  work 
on  the  coal  and  land  goods? — A.  No,  sir,  I  didn’t;  because  the  coal  was  between  decks, 
and  nothing  such  could  be  got  out  of  the  ship  until  after  the  coal  was  discharged, 
except  a  small  invoice  of  salt  which  was  in  the  after-hatch,  which,  I  think,  had  been 
discharged  previous  to  this. 

Then  came  some  evidence  on  the  other  side,  brief  but  decisive ; 

A.  De  L.  Rogers  recalled  and  examined. 

By  Mr.  Bayard  : 

Question.  You  have  seen  Mr.  Du  Moulin,  who  was  examined  as  a  witness  here, 'the 
weigher  of  Mr.  Thompson  ? — Answer.  Yes,  sir. 

Q.  Is  he  the  person  whom  you  described  in  your  letter  of  the  name  of  Muller?— A. 
The  same. 

Q.  The  same  man  ? — A.  Yes,  sir. 

Q.  You  misunderstood  his  name  ? — A.  I  did  ;  yes,  sir. 

Q.  Is  the  person  who  has  just  been  examined,  Mr.  Cloyes,  whose  name  is  printed  in 
this  paper  as  Clayes,  the  same  party  ? — A.  The  same  party ;  yes,  sir. 

Next  the  following  affidavit  was  received  by  the  committee : 

John  T.  Ward,  being  duly  sworn,  says  he  is  a  city  weigher,  and  resides  at  No.  668 
Lorimer  street,  Green  Point,  Long  Island,  and  was  employed  during  the  month  of  De¬ 
cember  last  to  weigh  part  of  an  invoice  of  gas  cannel-coal,  on  board  ship  Princeton,  at 
pier  48,  East  River,  as  it  was  discharged  into  lighters.  A  gentleman  came  on  board 
the  ship,  and  made  some  inquiry  in  reference  to  the  coal,  and  the  inspector,  W.  O. 
Cloyes,  said  to  me,  “  Who  was  that  stout  man  just  left  ?”  I  told  him  I  did  not  know 
positively,  but  thought  it  was  Mr.  Benedict,  the  owner  of  the  coal.  Cloyes  then  said 
to  me  that  he  (meaning  Mr.  Benedict)  was  a  “  damned  mean  old  cuss  that  he  had  tried 
to  get  him  to  give  him  a  load  of  coal,  but  that  he  would  not,  and  that  he  meant  to  get 
square  with  him.  Cloyes  then  asked  the  stevedore  if  he  could  not  stop  work  in  coal 
and  land  goods. 

The  gas-coal  was  mixed  with  another  lot  of  cannel,  and  I  saw  some  gas  cannel 
being  landed  on  the  dock  with  carts. 

JOHN  T.  WARD. 

Sworn  to  before  me  this  1st  day  of  February,  1872. 

[seal.]  SAMUEL  GODEN, 

Notary  Public. 

Then  Cloyes  was  recalled,  but  did  not  mend  his  case  at  all,  though, 
as  before,  he  denied  nearly  everything  point-blank. 

Finally,  Mr.  Benedict  was  examined,  a  member  of  a  large  firm  in 
New  Haven,  and  well  known  to  the  chairman  of  the  committee,  (vol. 
3,  p.  29 :) 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


LXXXIX 


Henry  W.  Benedict  sworn  and  examined. 

By  the  Chairman  : 

Question.  Were  yon  interested  in  the  importation  of  coal  by  the  Princeton  ? — An¬ 
swer.  Yes,  sir ;  I  was  the  owner  of  part  of  the  coal  by  her.  The  invoice  called  foi> 
251  tons. 

Q.  It  has  been  stated  before  the  committee  that  efforts  were  made  to  secure  gifts  of 
coal  for  the  purpose  of  facilitating  the  unloading  of  the  vessel,  and  for  the  purpose  of 
securing  proper  returns  ;  that  is,  returns  to  the  custom-house  that  would  be  favorable 
to  the  importer.  Can  you  give  any  information  in  regard  to  that ? — A.  Yes,  sir.  I 
came  to  New  York  on  Friday,  the  8th  of  December  ;  I  am  almost  sure  it  was.  I  went 
up  on  board  of  the  ship.  I  didn’t  then  expect  to  have  the  coal  weighed  by  a  city 
Aveigher,  but  very  soon  after  I  went  on  board  the  ship  an  official  approached  me  and 
asked  me  if  we  intended  to  have  the  coal  weighed.  I  told  him  there  was  another  lot 
of  coal  on  board  the  same  ship  and  I  was  fearful  that  they  would  be  mixed,  and  that 
I  should  have  mine  weighed  by  a  city  weigher.  He  then  said  to  me  if  it  was  neces¬ 
sary  to  have  it  weighed,  that  he  could  give  me  weights  or  assist  me  in  any  way  that  I 
wanted  about  that.  I  still  told  him  that  I  thought  I  should  have  my  coal  weighed. 
This  was  somewhere  about  10  o’clock  in  the  morning ;  from  10  to  11  they  were  getting 
ready  to  go  to  work,  expecting  to  go  to  Avork  after  dinner.  I  remained  there  until 
about  noon.  Before  I  left  the  ship  he  asked  me  if  the  cannel-coal  was  not  a  good  grate- 
coal.  I  told  him  it  was.  “  Send  me  iip  a  load  to  my  house.”  ( 

By  Mr.  Bayard  : 

Q.  Who  was  this?— A.  The  officer, the  inspector, the  man  who  had  the  permit,  whose 
name  I  understand  to  be  Cloyes.  I  didn’t  then  know  what  his  name  was,  but  I  know 
distinctly  who  he  was,  because  he  was  the  officer  who  had  the  permit.  There  was 
another  gentleman  there,  who  tallied  the  coal,  who  wore  glasses.  I  am  not  talking 
about  him,  but  the  one  who  had  the  permit,  Cloyes,  as  I  understand  it.  I  remarked 
to  him  that  our  coal  was  gas-coal ;  there  was  another  lot  of  coal  on  board  the  ship, 
which  was  house-coal,  or  grate-coal,  and  didn’t  make  any  reply  as  to  whether  I  would 
give  him  any  coal  or  not.  I  didn’t  Avish  any  unnecessary  trouble  with  him,  but  I  was 
so  impressed  Avith  the  man’s  actions,  even  at  that  first  conversation,  that  I  thought 
that  I  should  haArn  trouble,  and  immediately  on  going  doAvn  to  our  broker’s  office,  on 
Wall  street,  Mr.  Briggs,  I  so  remarked  to  him.  I  went  up  there  again  that  afternoon, 
and  toAvard  night  the  same  man  approached  me  again,  and  demanded  a  load  of  coal 
of  me. 

By  the  Chairman  : 

Q.  What  did  he  say  in^his  demand? — A.  “  0,”  he  says,  “send  me  up  a  load  of  coal 
to  my  house — good  grate^coal.  I  have  a  grate,”  he  says.  If  those  are  not  the  precise 
words  they  are  certainly  the  substance  of  them.  This  last  was  on  Friday.  I  Avent 
home  on  Friday  afternoon.  On  Monday  I  went  doAArn  again  and  went  up  to  the  ship. 
He  again  repeated  the  demand  in  almost  the  precise  manner  that  he  had  before. 
*****  *  * 

Q.  Was  it  the  same  man  that  appeared  to  you  the  different  days  that  you  were 
there? — A.  Yes,  sir;  precisely  the  same. 

Q.  On  what  ground  did  he  place  it  ? — A.  He  didn’t  say  anything  about  any  ground, 
any  way. 

Q.  But  merely  suggested  that  you  should  give  him  the  coal? — A.  Yes,  sir;  that  I 
should  send  him  the  coal.  Perhaps  he  didn’t  use  the  word  “give;”  but  send  up  to  his 
house.  I  don’t  think  he  did  use  the  Avord  “give.”  He  says,  “Send  me,  to  my  house,  a 
load  of  coal.” 

Q.  Did  he  or  not  intimate  any  Avay  in  which  he  could  render  you  any  service  or 
compensation  for  it? — A.  In  the  first  instance  he  did,  Avhen  he  began  the  conversation. 

Q.  What  did  he  say? — A.  “You  needn’t  have  this  coal  Aveighed.  I  can  giATe  you 
weights,  if  you  want  anything  of  that  kind.” 

Q.  Did  he  make  a  proposition  to  render  services  in  any  other  way  or  not  ? — A.  Not  in 
so  many  Avords.  I  became  deeply  impressed  Avitli  the  fact  that  I  should  have  trouble 
about  that  coal  right  straight  through,  from  the  actions  of  the  man.  We  sometimes 
judge  quite  as  much  from  actions  as  from  Avords. 

*Q.  Did  he  obstruct  you  in  getting  your  coal? — A.  That  question  I  cannot  positively 
answer.  I  will  state  we  were  stopped  before  we  had  near  all  our  coal. 

******* 

By  Mr.  Bayard  : 

******* 

Q.  You  said  from  this  man’s  manner— which,  as  you  very  truly  stated,  sometimes  is 
more  expressive  than  words — you  anticipated  that  you  would  have  trouble  about  your 
coal,  if  his  demands  were  not  complied  Avith  ? — A.  I  did,  sir. 

Q.  Did  you  find  that  your  apprehensions  were  realized  in  the  result  ? — A.  Certainly 
I  have ;  yes,  sir. 


xc 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Q.  Did  you  find  that  there  had  been  a  delay  in  the  delivery  of  your  coal;  that  the 
stevedore  had  knocked  off  the  delivery  ? — A.  Certainly ;  and  I  tried  my  best  to  get 
them  to  work  that  day,  but  I  couldn’t ;  we  lost  the  whole  day,  and  the  next  they  gave 
us  a  little  more  coal,  not  very  much. 

******* 

By  Mr.  Casserly  : 

Q.  What  is  your  firm  ? — A.  H.  W.  Benedict  &  Co. 

Q.  In  New  Haven  ? — A.  Yes.  I  am  the  head  of  the  firm. 

Q.  Your  firm  is  quite  largely  in  the  business  of  importing  coal? — A.  Yes;  we  do 
import  a  good  deal  of  coal. 

Q.  Generally  from  this  port? — A.  No,  sir;  we  import  more  to  New  Haven  than  we 
do  here. 

Q.  Direct  to  New  Haven  ? — A.  Yes ;  a  much  larger  amount  there. 

This  was  a  very  flagrant  case  of  gross  false  swearing  on  the  part  of 
the  officials.  The  committee  subsequently  voted  to  send  the  papers  and 
testimony  to  the  collector,  but  up  to  the  latest  session  of  the  committee, 
June  1,  1872,  nothing  further  was  heard  of  the  matter. 

A  lamentable  feature  was,  that  the  two  custom-house  witnesses  were 
by  no  means  unfavorable  specimens  of  their  class.  Du  Moulin,  the 
weigher,  was  a  man  of  much  more  than  average  capacity  and  demeanor. 
Oloyes,  though  not  equal  to  the  other,  was  still  a  man  of  more  native 
shrewdness,  and  of  abundant  intelligence. 

weighers’  department. 

In  the  weighing  department  habitual  violations  of  law  against  bribery 
were  fully  proven.  Volume  2,  page  568,  Mr.  Winslow  T.  Perkins,  a 
United  States  weigher,  was  examined,  producing  the  following  certifi¬ 
cate  : 

Senate  Chamber,  Washington  D.  C.,  July  20,  1870. 

Dear  Sir  :  We  desire  to  unite  in  recommending  W.  T.  Perkins,  a  weigher  now  in 
the  New  York  custom-house,  and  to  ask  that  he  may  be  retained.  He  is  a  man  of 
ability  and  integrity,  and  a  true  and  active  republican. 

"  We  have  the  honor  to  be,  very  respectfully,  yours, 

A.  H.  CRAGIN. 

J .  W.  PATTERSON. 

Hon.  Thomas  Murphy, 

Collector  of  the  Port  of  New  York. 

He  testified  as  follows : 

By  Mr.  Bayard  : 

Q.  The  committee  has  been  charged  in  the  ex  a  mination  as  to  the  payment  of 
moneys  unauthorized  by  law,  the  receipt  of  moneys  unauthorized  by  law  ;  have  you 
any  knowledge  of  such  a  system  of  things  in  the  weighers’  department,  in  the  way  of 
an  overemployment  of  hands,  or  in  the  receipt  of  fees  that  were  not  established  by 
law,  by  the  weigh-master  ? — A.  There  was  a  certain  species  of  fees  called  “  perquisites” 
that  weighers  received. 

Q.  What  are  they  ? — A.  They  are  for  what  they  call  returns  made  to  the  importer 
by  the  weigher  of  the  weights  of  goods  of  different  kinds. 

Q.  Who  pays  that  ? — A.  The  importer. 

Q.  To  whom  does  he  pay  it? — A.  He  pays  it  to  the  weighers,  or  their  men. 

Q.  You  mean  the  United  States  weigher  ? — A.  Yes,  sir. 

Q.  Do  you  know  what  the  rate  of  these  charges  are,  if  you  remember  any  ? — A. 
They  vary,  according  to  the  customers  ;  some  pay  10,  15,  and  20  cents  a  ton  for  iron — 
pig-iron,  old  rails,  and  pig-lead. 

Q.  That  consists  merely  in  giving  the  importers  an  accurate  copy  of  the  returns 
they  have  made  for  the  United  States  ? — A.  That  is  so. 

Q.  Is  that  to  save  importers  the  necessity  of  weighing  it  over  again? — A.  Yes,  sir; 
they  sell  by  weights,  and  it  saves  them  the  necessity  of  having  it  weighed  by  the  city 
weigher. 

Q.  Did  you  ever  know  anything  of  the  custom-house  weights  being  originally  made 
by  the  city  weigher,  and  his  returns  being  copied  by  the  United  States  weighers,  and 
duplicates  made  in  that  way  ? — A.  I  never  did. 

Q.  What  number  of  men  were  employed  in  weighing  there ;  more  than  were  re¬ 
quired,  or  only  a  proper  number  ? — A.  On  some  districts  there  are  more  than  are 
required,  and  some  districts  no  more  than  are  required. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION, 


XCI 


Q.  Just  state  what  wastlie  condition  of  that,  and  the  comparative  number  of  men 
employed  in  the  different  districts. — A.  Generally,  it  takes  four  men  to  run  a  gang — 
what  they  call  a  gang — with  perhaps  a  booker — one  who  takes  weights.  Four  men 
will  do  it ;  five  at  the  outside.  That  is  all  that  is  necessary,  as  a  general  thing. 

Q.  How  many  have  you  known  to  be  employed  ? — A.  Seven  or  eight. 

Q.  How  many  of  these  were  superfluous  hands  ? — A.  I  should  think  from  three  to 
four ;  three,  certainly. 

Q.  Do  you  mean  by  that  that  seven  or  eight  men  were  employed  to  do  the  work  of 
four? — A.  Yes. 

Q.  Could  four  men  have  thoroughly  and  readily  performed  that  work  ? — A.  Four  or 
five ;  yes,  sir. 

Q.  How  often  have  you  seen  that,  and  how  many  gangs  in  which  this  superfluous 
number  of  men  were  employed  ? — A.  I  don’t  recollect  now  seeing  anything  of  it,  only 
on  one  district,  where  my  attention  was  called  to  it. 

Q.  Which  district  was  that  ? — A.  That  was  the  district  adjoining  me ;  on  the  district 
of  Mr.  Reed. 

Q.  What  Reed  ? — A.  E.  Harrison  Reed. 

Q.  Is  he  still  in  the  custom-house  employ  ? — A.  I  don’t  know. 

Q.  Was  he  in  the  custom-house  when  you  left  there  ? — A.  Yes,  sir. 

Q.  Is  there  an  equal  amount  of  work  in  the  different  districts ;  is  the  work  of  weigh¬ 
ing  apportioned  so  as  to  equalize  the  amount  and  keep  all  the  different  parties  busy  in 
the  district  ? — A.  No,  sir ;  it  was  very  unequal. 

Q.  Is  the  salary  of  the  weighers  all  the  same  ? — A.  Yes. 

Q.  How,  then,  can  you  say  there  was  a  very  unequal  distribution  of  work  ? — A. 
Some  would  have  nothing  on,  and  other  districts  would  have  a  large  amount  of  work. 

Q.  Do  you  know  what  was  the  result  or  object  of  that? — A.  I  don’t  know  as  I  under¬ 
stand  the  force  of  the  question. 

Q.  I  understand  from  you  that  the  weighers  are  all  salaried  officers  ? — A.  Yes ; 
received,  the  same  salary. 

Q.  You  say  some  would  be  overpressed  with  work,  while  others  would  be  apparently 
idle? — A.  Yes. 

Q.  I  ask  you  why  that  should  be,  or  what  object — their  object  in  such  an  unequal 
distribution  of  the  labor? — A.  The  object  of  it  is,  every  weigher  is  anxious  to  have  all 
that  he  can  get  on  his  district,  and  some  weighers  have  the  means  and  the  faculty 
of  getting  more  on  their  district  than  others  do  ;  and  in  doing  that  it  makes  it  very 
unequal. 

Q.  Are  weighers  paid  by  fees  or  by  salary  ? — A.  They  are  paid  by  salary. 

Q.  What  can  be  the  object  of  a  man  in  seeking  more  work  than  conveniently  he  can 
perform,  or  is  his  fair  share  in  distribution  as  to  numbers  ? — A.  If  a  vessel  yields  so 
much  to  a  weigher  in  the  shape  of  perquisites — if  one  vessel  will,  another  vessel,  of  the 
same  kind,  will  yield  twice  as  much,  and  consequently  it  is  to  his  interest  to  get  as 
many  vessels  and  as  much  work  as  he  can. 

Q.  Are  those  perquisites  you  speak  of  in  the  shape  of  duplicate  returns  ? — A.  Yes. 

Q.  And  for  that  reason  the  districts  which  are  most  crowded  with  work  are  the  most 
profitable  to  the  weigher  ? — A.  Yes. 

Q.  Those  jjarquisites  have  nothing  to  do  with  the  salaries? — A.  No,  sir. 

Q.  You  say  they  are  paid  by  the  importers? — A.  Yes. 

Q.  Is  that  the  constant  practice  in  this  port  ? — A.  I  think  it  is,  as  far  as  my  knowl¬ 
edge  extends  ;  it  was  when  I  was  there. 

Q.  Did  you  ever  know  of  any  system  prevailing  there  of  assessments  upon  the 
laborers  of  weigh-wasters,  or  upon  the  weigh-masters  themselves,  in  favor  of  the 
harbor-masters,  to  induce  vessels  to  be  brought  there  ? — A.  There  was  an  understand¬ 
ing  among  the  weighers  that  some  harbor-masters,  for  a  certain  percentage  of  the  per¬ 
quisites,  would  crowd  more  vessels  on  to  their  districts, and  so  share  the  perquisites  to 
a  certain  extent  with  them,  I  understand. 

Q.  Did  you  ever  know  anything  of  that  kind  attempted  in  your  district  ? — A.  Well, 
only  once.  Once  there  was  a  man  on  my  district  that  I  discharged  for  drunkenness, 
and  a  day  or  two  after  he  was  discharged  he  brought  a  letter  to  me  from  the  harbor¬ 
master  of  that  district. 

Q.  Who  was  that?— A.  That  was  Mr.  Thompson  ;  James  M.  Thompson. 

Q.  The  one  who  is  now  a  weigher? — A.  United  States  weigher;  telling  me  that  if  I 
would  reinstate  this  man  to  his  former  position  he  would  put  vessels  on  to  my 
district,  so  that  it  would  be  an  advantage  to  me. 

By  Mr.  Pratt  : 

Q.  Who  wrote  you  that  letter ;  who  said  that  to  you  ? — A.  Mr.  James  M.  Thomx>son 
wrote  me  a  letter  to  that  effect. 

By  Mr.  Bayard  : 

Q.  The  one  who  is  at  present  a  weigh-master  here  ? — A.  He  was  when  I  left  the 

custom-house. 

S.  Eep.  227 - vm 


XCII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Q.  What  was  understood  to  be  the  value  of  an  ordinary  vessel,  to  the  weigher,  in 
the  amount  of  perquisites  ? — A.  It  was  understood  that  a  good  Liverpool  ship  was 
worth  one  hundred  to  two  hundred  dollars ;  and  some,  more. 

Q.  That  is  the  perquisite  for  the  duplicate  returns  rendered  of  the  weights  of  her 
cargoes  ? — A.  Yes. 

Q.  Did  you  ever  know  of  subscriptions  being  raised  among  weighers  or  others  to 
induce  harbor-masters  to  send  ships  to  their  particular  districts  ? — A.  I  cannot  say  that 
ever  there  was  any  subscription  raised  for  that  purpose ;  there  was  a  subscription 
raised  for  a  harbor-master  ;  I  could  only  draw  an  inference  of  what  it  was  for. 

Q.  You  never  saw  any  list  of  that  kind  ? — A.  There  was  a  list  of  that  kind  brought 
to  my  office,  but  I  wasn't  in  when  it  was  brought,  and  I  didn’t  see  it. 

Q.  What  was  the  character  of  that  ? — A.  The  character  of  it  was  that  we  agreed  to 
give  the  harbor-master  so  much  for  a  New  Year’s  present. 

Q.  In  order  to  influence  ships  ? — A.  They  didn’t  say  that. 

Q.  Was  that  the  object? — A.  That  was  the  object,  no  doubt;  I  have  no  reason  to 
doubt  it. 

Q.  Have  you  any  idea  to  what  extent  these  perquisites,  over  and  above  the  salary, 
would  reach  in  the  different  districts  ? — A.  Some  districts  would  be  quite  large,  and 
others  would  pay  nothing  to  speak  of,  hqrdly.  One  -district — I  think  there  are  three 
or  four  on  the  North  River — I  have  been  told  that  the  perquisites  by  the  weighers  was 
as  high  as  $300  a  month. 

-By  Mr.  Casserly  : 

Q.  That  would  be  $3,600  a  year  ? — A.  Yes. 

By  Mr.  Bayard  : 

Q.  That  was  over  and  above  their  regular  salary  ? — A.  That  had  nothing  to  do  with 
their  salary. 

Q.  Was  this  system  in  full  practice  during  the  whole  period  that  you  remained  in 
the  custom-house  employment  ? — A.  I  think  it  was  ;  yes. 

Q.  When  did  you  leave  the — I  think  it  was  on  the  17th  of  May,  1871  ? — A.  Seven¬ 
teenth  day  of  May,  1871 ;  yes. 

Q.  How  came  you  to  leave  the  service  ? — A.  I  was  removed  by  the  collector. 

Q.  Was  there  any  complaint  made  against  you  ? — A.  No,  sir. 

Q.  Any  charges  ? — A.  No,  sir  ;  none  that  I  ever  knew  of.  I  was  told  by  Mr.  Terwil- 
liger  that  there  was  none. 

"Q.  Was  there  any  complaint  against  the  manner  in  which  your  duties  were  per¬ 
formed  ? — A.  Not  that  I  kuow  of;  Mr.  Terwilliger  said  there  was  none  ;  1  asked  him. 

Q.  To  what  do  you  ascribe  your  removal? — A.  I  ascribe  it  to  the  refusal  of  Senator 
Patterson  to  make  a  favorable  report  as  to  the  conduct  of  custom-house  affairs  under 
the  administration  of  Collector  Murphy. 

Q.  You  say  he  refused  it ;  had  he  ever  been  asked  to  do  it  ? — A.  I  don’t  know  that  he 
ever  had  been  asked  to  do  it. 

Q.  Was  he  ever  asked  by  you  to  do  it? — A.  No,  sir ;  he  was  never  asked  by  me  to 
do  it- 

Q.  State  what  connection,  then,  his  failure  to  report  favorably  as  to  the  condition  of 
the  custom-house  could  have  upon  your  position  ? — A.  About  the  23d  day  of  February, 
1871,  I  received  a  note  from  Mr.  Benedict,  the  deputy  surveyor,  asking  me  to  report  to 
his  desk  immediately.  I  went  there  and  asked  him  what  was' wanted,  and  he  said  the 
collector  wanted  to  see  me.  I  immediately  went  to  the  collector’s  office,  and  Mr.  Ter¬ 
williger  said  the  collector  had  just  left  with  the  committee — investigating  committee — 
of  which  Senator  Patterson  was  then  chairman.  He  said  that  he  was  sorry  they  had 
left,  for  the  collector  wanted  me  to  go  in  before  the  committee  and  make  a  statement 
of  the  economical  and  straightforward  way  he  was  running  the  custom-house,  in  order 
to  overcome  the  testimony  of  other  witnesses  that  had  put  in  some  damaging  testimony 
against  the  collector;  and  he  said  the  committee  had  gone  and  it  was  too  late  to  do 
it ;  he  then  asked  me  if  I  could  not  see  Patterson — Senator  Patterson — and  influence 
him  somewhat  to  make  a  favorable  report. 

Q.  Who  asked  you  that? — A.  Mr.  Terwilliger. 

Q.  Was  he  the  deputy  collector? — A.  He  was  the  deputy  collector  and  private  sec¬ 
retary  of  the  collector. 

Q.  What  collector  ?— A.  Collector  Murphy.  I  told  him  that  I  didn’t  think  that  Sen¬ 
ator  Patterson  could  be  approached  in  any  such  way  as  that.  He  then  asked  me  if  I 
was  acquainted  with  Mr.  Benton. 

Q.  Was  he  aware  of  the  fact  that  Mr.  Patterson  had  been  your  personal  friend  and 
was  one  of  your  recommenders  ? — A.  He  was,  for  he  received  this  letter  of  recommen¬ 
dation  to  Mr.  Murphy  ;  he  understood  that  very  well,  and  had  had  conversations  with 
Senator  Patterson  in  regard  to  me  during  the  sitting  of  that  committee. 

Q.  Continue  your  statement. — A.  He  then  wanted  to  know  if  I  was  acquainted  with 
Mr.  Benton,  who  was  also  a  member  of  the  committee. 

Q.  Was  Mr.  Benton  a  member  from  New  Hampshire  ? — A.  He  was;  he  told  me  he 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XCIII 


was.  Well,  lie  said  if  I  could  not  approach  Senator  Patterson,  if  I  could  not  operate 
on  him  through  Benton  ;  and  at  the  same  time  said  that  he  thought  Mr.  Benton  was 
all  right  any  way.  I  told  him  I  didn’t  know  anything  about  how  Mr.  Benton  felt  in 
reference  to  it,  nor  what  he  thought  of  it,  but  that  I  would  see  Mr.  Benton  before  he 
left,  if  I  could,  and  ascertain  something  of  the  nature  of  the  report  that  they  would 
make.  I  came  up  here  that  night  to  see  Mr.  Benton  at  this  house,  and  he  and  the  rest 
of  the  committee  had  gone.  I  was  repeatedly  told  while  in  the  custom-house,  while 
the  investigating  committee  was  making  their  investigation  here,  by  custom-house 
men,  that  my  tenure  of  office  here  would  depend  a  good  deal  on  the  kind  of  report 
that  Senator  Patterson  made.  Senator  Patterson  made  the  report,  and  the  first  thing 
I  knew  I  was  removed  ;  and  Senator  Patterson  wrote  a  letter  to  the  collector,  asking 
him  why  I  was  removed,  and  to  that  letter  he  never  has  deigned  to  make  a  reply  as  yet. 

Q.  Did  Mr.  Patterson  make  any  application  elsewhere  for  your  retention  ? — A.  He 
went  to  the  Secretary  of  the  Treasury,  Mr.  Boutwell ;  Mr.  Boutwell  hunted  up  the 
papers,  but  told  him  that  it  was  too  late ;  that  I  had  been  removed  three  days  before 
that,  but  that  if  he  had  known  it  in  season  I  should  not  have  been  removed ;  he  would 
have  stopped  it. 

Q.  Did  Mr.  Patterson  also  ascertain  there  was  no  complaint  against  you  for  any 
want  of  proper  performance  of  your  duties  ? — A.  He  did ;  yes,  sir. 

Q.  I  understand  you  to  say  you  applied  yourself,  to  know  if  ther.3  were  any  charges 
against  you  ? — A.  I  did,  to  Mr.  Terwilliger. 

Q.  Had  there  been  any  charges  ? — A.  He  said  there  had  been  none.  Why  I  was  re¬ 
moved  he  said  he  could  not  tell.  It  was  a  removal  of  the  collector  ;  and  then  I  asked 
him  if  there  was  any  charges  against  my  official  conduct,  and  he  said  none  whatever, 
that  he  knew. 

Q.  Had  you  ever  been  applied  to,  while  in  the  custom-house  employ,  to  take  part  in 
the  primary  elections  of  your  party  ? — A.  I  had,  repeatedly,  by  different  persons. 

Q.  What  were  the  intimations  made  to  you  in  regard  to  that  ? — A.  That  if  1  wanted 
to  be  in  good  standing  with  the  collector  it  was  necessary  for  me  to  take  an  active 
part  in  the  primaries  in  the  city. 

The  testimony  of  John  McCabe,  volume  pages  1G1  to  170  5  of  James 
Elliot,  volume  1,  page  199;  of  Augustus  Bacon,  volume  2,  page  479;  of 
Robert  Hinvest,  volume  1,  page  218;  of  William  H.  Proctor,  volume  1^ 
*  page  206 ;  of  Patrick  Callahan,  volume  1,  page  210,  all  establish  the 
existence  of  bribery  and  corruption  in  the  weighing  department. 

The  alarming  fact  also  appears  throughout  the  testimony  relating  to  the 
weighers’  department,  that  the  weights  of  dutiable  merchandise,  upon 
the  truth  and  accuracy  of  which  the  Government  depends  for  the  ascer¬ 
tainment  of  its  just  dues,  are  seldom  if  ever  taken  by  a  sworn  officer 
of  the  United  States.  The  process  almost  invariably  is  that  the  goods 
are  weighed  by  a  gang  of  laborers,  generally  five  in  number,  one  of 
whom  adjusts  the  beam  and  makes  a  memorandum  of  the  weight. 
These  men  are  paid  forty  cents  per  hour,  and  are  of  the  average  class 
of  dock-laborers,  and  employed  for  no  fixed  period,  but  irregularly,  and 
almost  by  chance,  by  the  w'eigher  himself,  who  is  seldom  present  during 
the  operation  of  weighing.  The  weigher  usually  has  an  office  within  his 
district,  where  he  or  his  clerk  receives  the  returns  from  the  men  who 
take  the  w  eight,  knowing  nothing  of  their  accuracy,  and  these  returns 
are  carried  to  the  custom-house,  and  upon  them  the  duties  to  be  paid 
are  calculated. 

It  is  not  surprising  that,  under  such  a  condition  of  things,  gross  frauds 
are  perpetrated  upon  the  revenue. 

It  is  shown  also  by  the  testimony  that  the  importers  employ  city 
weighers  at  their  private  expense,  and  that  the  custom-house  weighers 
adopt  their  returns,  making  charges  for  labor,  &c.,  in  weighing,  wffiich 
has  never  been  performed. 

So  open  and  notorious  are  these  fraudulent  practices,  that  they  either 
must  be  known  to  the  leading  officials  at  the  custom-house,  or  those 
officials  must  be  grossly  derelict  in  their  duty  of  supervision. 

III. 

The  third  head  is  as  follows : 

And  also,  whether  articles  of  merchandise,  while  under  the  control  of  officers  of  the 


XCIV 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


custom-lionse,  hare  been  abstracted,  and  whether  or  not  such  articles  have,  on  appli¬ 
cation  of  the  owners  in  several  cases,  been  returned,  and  whether  any  officers  of  the 
custom-house  have  been  punished  for  abstracting  articles  of  merchandise  under  their 
control. 

ABSTRACTION  OF  MERCHANDISE  WHILE  IN  THE  CUSTODY  OF  THE 

GOVERNMENT. 

Many  witnesses  testified  in  relation  to  the  frequent  and  serious  char¬ 
acter  of  these  losses. 

Mr.  Lewisobn,  an  importer,  volume  2,  page  645,  &c.,  states  numerous 
instances  in  which  his  goods  had  been  plundered  at  the  public  stores  and 
general-order  stores,  and  he  had  nol  only  been  unable  to  find  remedy  or 
compensation,  but  he  had  been  compelled  to  pay  duty  upon  the  mer¬ 
chandise  abstracted. 

Mr.  Pohalski,  volume  1,  page  533,  &c.,  complains  of  the  constant  and 
serious  plunder  of  cigars  imported  by  him,  and  his  failure  to  obtain  any 
satisfaction  therefor. 

Mr.  J.  Eugene  Robert,  an  importer  of  watches,  states  a  further  case 
of  loss,  and  the  manner  in  which  his  complaint  was  received  at  the  cus¬ 
tom-house.  (Volume  2,  page  114,  &c.)  It  proves  the  want  of  security  to 
merchants  for  their  property  while  detained  by  the  Government  in  its 
own  custody,  and  the  difficulty,  if  not  utter  impossibility,  of  obtaining 
relief  under  the  present  system  of  custom-house  management,  espe¬ 
cially  as  administered  by  Mr.  Thomas  Murphy. 

Mr.  Robert  says : 

By  Mr.  Casserly  : 

Q.  How  long  have  you  been  so,  [an  importer  of  watches]  ? — A.  Ten  years. 

*  Q.  Did  you  lose  a  case  of  watches  recently  ? — A.  Well,  yes,  sir. 

Q.  State  the  circumstances  of  that  loss,  so  far  as  you  know  them. — A.  I  imported 
a  case  of  watches ;  paid  the  duty  on  it ;  expected  to  find  the  case  come  in  the  usual 
way ;  the  case  never  reached  me ;  it  was  alleged  to  have  been  stolen  while  on  the 
custom-house  cart,  from  the  steamer  to  the  public  store.  I  made  inquiries  at  the 
custom-house;  I  was  directed  to  the  different  officials;  got  not  much  assistance.  I 
stated  the  facts  to  the  collector  in  writing,  but  got  no  answer.  A  couple  of  weeks 
after  I  wrote  to  Washington.  The  Secretary  of  the  Treasury  wrote  me  two  or  three 
letters.  The  last  letter  was  that  the  remedy,  if  any — showing  a  doubt — was  in  suing 
the  carman.  The  carman  had  his  license  revoked ;  had  no  means  whatever.  I  looked 
to  the  district  carmen,  his  employers.  They  were  Crane  and  Hoffman.  Crane  was  a 
man  without  any  means ;  Hoffman  was  an  assumed  name,  although  he  had  given 
bonds  in  the  custom-house. 

Q.  You  say  it  was  an  assumed  name? — A.  Because  I  could  never  find  him,  and  the 
carman  told  me  another  name  for  him  ;  it  was  a  name  merely  on  the  hooks  of  the  cus¬ 
tom-house.  So  there  was  no  redress  from  these  parties.  Their  security^  Henry  T. 
Welles,  went  South  as  soon  as  it  was  spoken  about.  Then  I  wrote  to  Washington,  and 
they  told  me  to  sue  the  bondsman,  if  I  could  not  get  redress  from  the  carman.  I  in¬ 
quired  by  what  authority  in  law  I  could  sue  the  bondsman ;  twice  the  answer  was 
evaded — the  question  evaded.  They  merely  stated  the  Government  was  not  responsi¬ 
ble  for  my  loss.  I  have  understood  since  that  the  bond  given  was  not  for  the  protec¬ 
tion  of  the  merchant,  but  for  the  security  of  the  collector  personally;  so,  of  course,  I 
have  no  redress.  Now,  I  have  never  had  the  case,  but  paid  the  duty  on  it,  and  here  at 
present  I  am  without  any  means  of  redress  in  this  case. 

Q.  Do  you  know  that  the  case  was  delivered  from  the  ship? — A.  I  dot 

Q.  What  was  the  value  of  it  ? — A.  About  $2,000. 

Q.  Contained  how  many  watches  ? — A.  About  three  hundred. 

Q.  What  kind  of  watches  ? — A.  These  were  silver  and  movements. 

Q.  I  understand  jfou  to  say  that  the  carman  who  took  the  box  from  the  ship  is  a  per¬ 
son  of  no  responsibility  ? — A.  None. 

Q.  That  when  you  tried  to  resort  to  his  employers,  the  district  carmen,  Crane  and 
Hoffman,  you  found  that  Crane  was  of  no  responsibility  ? — A.  None. 

Q.  And  that  Hoffman  was  a  fictitious  name  ? — A.  A  fictitious  name. 

Q.  Explain  what  you  mean  by  a  fictitious  name.  Was  there  any  real  person  behind 
that,  name? — A.  Yes. 

Q.  Who  was  it  ? — A.  A  Mr.  Batterson  or  Patterson.  I  did  not  understand  exactly; 
say  Patterson. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XCV 


Q.  What  was  the  object  of  Mr.  Patterson  or  Batterson  in  concealing  his  real  name  ? — 
A.  I  don’t  know. 

Q.  Was  there  such  a  person  employed  in  the  custom-house  ? — A.  No,  sir. 

Q.  Do  you  say  it  was  not  so  or  that  you  do  not  know  the  fact? — A.  Well,  lie  is  not 
employed  in  the  custom-house. 

Q.  Did  you  ever  trace  him  out  ? — A.  I  was  introduced  to  him. 

Q.  What  did  he  say  on  the  subject  ? — A.  He  pretended  to  have  nothing  to  do  with 
the  case ;  but  he  was  the  only  one  that  showed  any  signs  of  responsibility. 

Q.  Did  he  ever  make  you  any  satisfaction  for  your  loss  ?— A.  No,  sir ;  he  said  it  was 
none  of  his  business. 

Q.  What  amount  of  duties  did  you  pay  on  the  case  ? — A.  Two  hundred  and  eighty- 
seven  dollars,  gold. 

Q.  Is  that  included  in  your  valuation  of  $2,000  on  the  case? — A.  It  is. 

Q.  Duties  included,  the  loss  to  you  is  $2,000? — A.  About. 

Q.  Is  that  currency  or  gold  ? — A.  Well,  it  would  be  $1,900  and  a  fraction  in  gold. 

By  Mr.  Pratt  : 

Q.  Where  were  these  watches  imported  from  ? — A.  From  Switzerland. 

Q.  Will  you  fix  the  time,  and  what  vessel  did  they  come  on  ? — A.  November  21, 1870, 
by  the  Santiago  de  Cuba. 

Q.  How  do  you  know  that  this  case  of  watches  arrived  in  the  ship  ? — A.  The  bill  of 
lading  shows  it,  and  the  carman’s  receipt. 

Q.  You  saw  that  receipt,  did  you  ? — A.  Not  myself ;  I  did  not. 

Q.  Who  did  the  carman  give  that  receipt  to  ? — A.  Well,  the  case  left  the  steamer, 
went  down  to  the  public  store  in  Greenwich  street,  but  they  were  too  late  for  the  pub¬ 
lic  store  there,  and  they  went  to  the  barge  office  and  remained  there  over  night ;  the 
next  morning  they  were  taken  from  there  to  the  store  in  Greenwich  street,  and  in  that 
time  they  were  stolen. 

Q.  Now,  how  do  you  know  all  that  ?  How  do  you  know  they  left  the  dock  and  went 
to  the  public  store  in  the  first  place,  and,  being  too  late  for  that,  went  to  the  barge  of- 
*  fice  ?  Did  you  see  them  in  possession  of  the  carman  ? — A.  I  never  see  the  goods  until 
they  reach  my  office. 

Q.  Did  you  ever  see  the  carman’s  receipt  for  that? — A.  I  think  not.  The  manifest 
of  the  vessel  will  show  that  they  were  in  that  vessel. 

Q.  You  found  that  the  carman  who  had  tlie  case  in  his  cart  was  an  irresponsible  per¬ 
son  ? — A.  Yes,  sir. 

Q.  But  you  found  that  he  was  employed  by  Crane  and  Hoffman? — A.  Yes,  sir. 

Q.  That  they  were  the  district  carmen  ? — A.  Yes,  sir. 

Q.  And  you  found  that  Crane  was  irresponsible? — A.  Well,  they  had  an  office  in 
South  street,  and,  immediately  when  I  learned  their  jfiace  of  business,  went  up  there, 
and  the  place  was  closed  ;  they  had  disappeared  ;  so,  of  course,  I  supposed  they  were 
irresi)onsible. 

Q.  I  mean  to  say  pecuniarily  irresponsible.  Were  they  men  of  pecuniary  responsi¬ 
bility  ? — A.  Crane  is  a  man  without  means,  I  have  understood ;  Hoffman  is  the  man 
that  don’t  exist ;  at  least,  the  name  does  not. 

Q.  You  say  that  Mr.  Hoffman,  who  was  represented  by  Mr.  Patterson — a  real  person — 
was  he  a  man  of  substance  ? — A.  That  I  cannot  tell. 

Q.  Have  you  ever  instituted  any  suit  against  Mr.  Patterson  ? — A.  No,  sir ;  but  I  have 
against  Collector  Murphy.  I  had  to  do  something.  I  sued  on  this  ground,  that  he  took 
irresponsible  bonds. 

Q.  That  is  the  nature  of  your  action  agaiust  him  ? — A.  Yes. 

Q.  That  is  pending  in  court  at  this  time  ? — A.  It  is  but  just  opened.  Yes,  sir ;  I  sup¬ 
pose  so. 

Q.  The  suit  lias  not  been  decided? — A.  No,  sir. 

Q.  You  charge  him  with  taking  an  insufficient  bond  from  the  district  carman  ? — A. 
Yes,  sir. 

Q.  Do  you  know  which  collector  took  this  bond;  whether  it  was  Mr.  Murphy  or  Mr. 
Grinnell  ? — A.  Mr.  Murphy. 

Q.  What  was  the  date  of  the  bond? — A.  I  took  a  copy  of  it,  but  I  have  not  in  my 
mind  the  date. 

Q.  You  have  not  got  that  copy  here? — A.  No. 

By  Mr.  Bayard  : 

Q.  In  what  office  did  you  find  that  bond  filed  ? — A.  I  think  they  call  it  the  carman’s 
bureau.  Mr.  Smith  is  at  the  head  of  it. 

Q.  You  took  a  copy  of  it  ? — A.  At  first  they  did  not  wish  to  let  me  take  a  copy  ;  then 
I  wrote  to  the  collector  and  got  no  answer ;  and  at  last  I  went  to  see  the  collector 
himself.  When  I  got  there,  I  suppose  I  waited  about  two  hours  before  they  allowed 
me  in  ;  found  the  room  full.  I  said  when  would  my  time  come.  The  remark  was,  that 
all  those  were  politicians  ;  that  if  I  had  any  business,  I  might  go  right  on.  I  was  there 
several  hours.  At  last  one  of  the  clerks  came  and  told  me  he  had  authority  from  the 


XCVI 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


collector  to  show  me  the  bond.  I  wished  then  a  copy;  there  was  another  difficulty ; 
they  did  not  want  to  allow  me  to  take  that. 

Q.  Who  declined  giving  you  the  copy  ? — A.  The  clerk.  I  insisted  on  it,  because  I 
wanted  something  like  legal  proof. 

Q.  Was  this  clerk  aware  that  you  had  met  with  this  serious  loss? — A.  I  think  I  told 
every  clerk  in  the  custom-house. 

Q.  You  wrote  to  the  collector  and  received  no  answer  ? — A.  No,  sir.  After  that  I  wrote 
to  the  Secretary  of  the  Treasury. 

Q.  What  effect  had  that? — A.  I  got  three  or  four  letters. 

Q.  Have  you  got  them? — A.  Not  with  me;  but  I  have  got  them  all. 

Q.  You  finally  succeeded,  against  the  will  of  this  clerk  at  first,  in  getting  this  copy 
of  the  bond? — A.  At  last  I  got  it. 

Q.  Do  you  remember  the  name,  on  the  bond? — A.  Crane  is  one,  and  G.  Hoffman  is 
the  other. 

Q.  Who  are  the  sureties  ? — A.  Henry  S.  Wells. 

Q.  Anybody  else  ? — A.  No,  sir. 

Q.  Any  witnesses  to  it  ? — A.  I  could  not  tell  you. 

Q.  Did  you  ever  ascertain  whose  duty  it  was  to  take  these  bonds  and  approve  these 
sureties  ? — A.  I  suppose  it  was  the  collector’s. 

Mr.  Schultz,  of  the  firm  of  Schultz  &  Clark,  volume  3,  page  160,  testi¬ 
fies  as  follows : 

C.  W.  H.  Schultz  sworn  and  examined. 

By  the  Chairman  : 

Question.  You  will  please  make  your  statement,  Mr.  Schultz. — Answer.  My  name  is 
Charles  William  Hermann  Schultz.  I  am  at  present  associated  with  Mr.  Clarke  in  the 
general  commission  business  in  New  York,  which  we  carry  on  at  Nos.  14  and  16  Vesey 
street.  I  came  to  this  country  and  started  business  on  my  own  account  in  the  fall  of 
1870.  On  the  1st  of  November  I  commenced  business.  As  the  importations  for  which 
I  sent  from  Europe  arrived  and  had  to  be  passed  through  the  custom-house,  I  found  that  * 
there  was  a  good  deal  of  trouble  connected  with  that  part  of  the  business — nmck  more 
than  I  had  expected.  I  had  at  that  time  not  much  experience — in  fact,  no  experience,  I 
may  say,  of  business  in  New  York  ;  sol  spoke  on  the  subject  to  other  merchants,  and  to 
my  clerk,  who  had  had  some  experience  then  in  that  part  of  the  business  with  other 
firms.  He  said,  “  O,  in  order  to  carry  on  that  business  smoothly,  you  must  make  up 
your  mind  to  fee  the  different  officials.  It  is  an  understood  thing  that  it  shall  be  done, 
and  unless  you  do  so,  you  will  find  obstacle's  thrown  in  your  way  at  every  step  you 
take.”  I  told  him  I  didn’t  see  it  in  that  light ;  that  I  looked  upon  the  officers  of  the 
government  in  every  country  as  the  officers  of  the  public  as  well;  and  that,  instead  of 
throwing  obstacles  in  the  way  of  the  importer,  they  ought  to  facilitate  the  operations 
of  commerce  as  much  as  possible.  “Well,”  I  was  told,  “all  right;  if  I  wanted  to  do 
that,  of  course  I  must  put  up  with  the  consequences.”  Importations  came  in,  and,  as 
you  are  aware,  Mr.  Chairman,  of  each  importation  one  package  has  to  be  sent  to  pub¬ 
lic  stores.  Every  package,  almost  without  exception,  which  was  sent  to  public  stores, 
wa‘s  afterward,  when  taken  out  of  bond,  or,  if  duty  was  paid  upon  it,  when  delivered 
to  us  or  to  me,  found  deficient  in  quantity.  That  deficiency  amounted  to  from  5  to  50 
and,  in  some  instances,  70  per  cent,  of  the  contents.  It  was  all  the  more  extraordinary, 
and  to  me  inexplicable,  that  this  should  be  so,  inasmuch  as  every  other  package  which 
had  arrived  by  the  same  ship  was  delivered,  when  delivered  to  us  direct  to  the  store, 
in  perfect  order.  Mostly  these  packages  which  were  deficient  were  marked  “  received 
in  bad  order.” 

By  Mr.  Howe  : 

Q.  This  deficiency,  you  say,  amounted  to — running  from  what? — A.  From  5  percent, 
to  75  per  cent,  in  one  instance. 

By  Mr.  Pratt  : 

Q.  What  was  the  character  of  these  packages ;  what  did  they  contain  ? — A.  Brandy, 
zgin,  spirituous  liquors  generally,  and  packages  of  bottled  beer,  too.  We  are  agents 
for  Bass  &  Co.  They  were  somewhat  deficient,  but  not  so  much.  The  more  valuable 
the  goods  the  greater  the  deficiency,  as  a  rule.  I  complained  to  Collector  Murphy 
about  it.  I  addressed  my  complaint  to  him,  and  he  referred  the  matter  generally  to 
the  head  of  the  department  in  the  public  stores.  The  reply  that  was  invariably  sent 
to  my  complaints  on  such  subjects  was  that  the  goods  were  received  in  that  condition 
in  the  public  stores,  and  that  nobody  was  to  blame.  I  then  tried  to  find  out  against 
whom  I  could  have  recourse  in  such  matters,  and  applied  to  the  steamship  companies. 

I  found  that  they  were  protected  by  a  clear  receipt,  which  the  custom-house  carman 
signed.  Ho  always  signed,  “Received  in  good  order  and  condition  such  and  such 
packages,”  and  of  course  the  steamship  companies  protected  themselves  behind  that 
receipt.  We  could  not  claim  against  them ;  that  was  very  certain.  Then  I  spoke  to 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XCVII 


the  custom-house  carmau  about  it.  He  said  he  could  not  get  the  goods  from  the 
steamship  companies  unless  he  gave  such  a  receipt  as  that ;  they  would  not  deliver  it 
to  him  without.  In  fact,  there  was  no  redress  to  be  had,  and  at  last  I  believed  I  was 
the  first  who  made  the  statement  public  in  the  New  York  press,'  and  gave  my  name. 
The  matter  had  become  so  annoying  that  I  was  determined  to  see  whether  a  stop  could  ^ 
not  be  put  to  it.  I  was  cautioned  against  it  by  some  friends,  who  said  you  will  get 
yourself  in  worse  trouble  by  doing  that,  because  they  will  put  a  job  on  you.  By  that 
I  understood  that  they  would  get  some  informer  to  lay  an  information  against  us,  and 
that  our  place  of  business  (I  had  then  gone  into  partnership  with  Mr.  Clarke)  might  be 
seized,  which  means,  in  most  instances,  the  ruin  of  the  firm  which  is  thus  attacked. 
Well,  I  am  not  naturally  of  a  timid  disposition,  and  I  thought  I  will  either  do  business 
without  fear  of  anybody,  carrying  out  the  law,  or  I  will  do  no  business  at  all ;  but  I 
did  not  mean  to  be  intimidated  "by  a  class  of  officials  who  ought  to  be  my  servants, 
instead  of  being  my  masters,  nor  will  I  bribe  them.  I  clearly  made  up  my  mind  to 
that.  Mr.  Clarke  coincided  with  me  in  that  view.  After  that  communication  had  been 
made  to  the  papers,  the  very  day  afterward,  I  may  say,  the  head  of  one  of  the  depart¬ 
ments  in  the  public  store  (I  think  Mr.  Sturgiss)  called  in  my  store  in  the  afternoon, 
accompanied  by  Mr.  Smith,  who  had  passed  ten  cases  of  sauces  which  we  had  received, 
of  which  each  case  had  been  marked,  “  Received  in  bad  order.” 

By  Mr.  Howe  : 

Q.  Who  did  you  say  Mr.  Sturgiss  was  ? — A.  He  was  chief  of  the  tenth  or  ninth  divi¬ 
sion — I  don’t  recollect  which — of  the  public  store,  as  it  is  called,  in  Greenwich  street. 
Mr.  Sturgiss  was  rather  excited,  and  spoke  loud,  and  said  I  had  rushed  into  print  with 
very  indecent  haste,  and  that  all  the  men  in  his  department  were  men  of  honor,  and 
quite  as  honorable  men  as  any  merchants,  &c.  I  told  him  very  distinctly  that  I  did 
not  accuse  any  individual;  but  that  I  certainly  intended,  if  I  could,  to  put  a  stop  to 
the  pilfering  which  had  been  perpetually  perpetrated  on  our  goods  while  in  charge  of 
the  customs.  Who  the  individual  was  we  did  not  consider  at  all ;  it  didn’t  matter  to 
us.  We  attacked  the  system  itself,  inasmuch  as  every  article  that  went  into  public 
store  seemed  to  be  looked  upon  as  public  property,  instead  of  being  ours.  To  cut  the 
story  short,  I  must  say  this  :  That  ever  since  that  time  every  package,  without  excep¬ 
tion,  which  we  have  received  through  the  public  store,  has  been  delivered  to  us  in 
perfect  order,  with  no  deficiency,  which  proves  that  some  good  has  been  done  at  any 
rate.  ' 

From  this  system  of  pilfering  from  packages  while  in  Government 
custody,  amounting  to  a  large  sum  in  the  aggregate,  the  great  importing 
houses  are  not  more  exempt  than  the  smaller  houses. 

Thus,  among  the  notices  of  letters  received  by  the  committee,  appears 
on  January  12,  1872,  volume  1,  page  337,  the  following  : 

Also,  a  letter  from  H.  B.  Claflin  &  Co.,  dated  January  11,  1872,  calling  the  attention 
of  the  committee  to  frequent  losses  sustained  by  them,  by  having  goods  taken  from 
their  cases  while  in  the  custody  of  the  custom-house.  They  state  that  they  lost  one 
dozen  silk  scarfs  from  a  case,  which  came  by  the  steamer  Abyssinia,  and  have  not  been 
able  to  obtain  any  satisfaction  therefor. 

THE  EVILS  OF  THE  “  BAD-ORDER  ”  MARK  ON  PACKAGES. 

The  blame  for  this  form  of  plundering  rests,  in  the  first  place,  with 
the  reprehensible  practice,  both  in  the  public  (appraisers’)  stores  and  in 
the  general-order  stores  of  Leet  &  Co.,  of  marking  packages  in  “  bad 
order”  almost  without  discrimination  or  regard  to  their  condition. 
During  a  visit  of  the  committee  to  the  Leroy  street  stores  of  Leet  &  Co., 
it  was  found  that  a  large  majority  of  the  packages  going  into  the  stores 
that  day  were  marked  “bad  order;”  but  in  most  instances  the  closest 
examination  by  members  of  the  committee  failed  to  show  any  appear¬ 
ances  of  “bad  order;”  nor  was  Mr.  Leet  or  any  of  his  employes  more 
successful.  By  nearly  every  witness  the  “  bad  order  ”  marking,  as  at 
present  practiced,  is  declared  to  be  at  once  an  incentive  to  stealing  and 
a  cover  for  it.  In  short,  it  is  a  gross  abuse,  which  should  be  at  once 
reformed.  The  testimony  of  Mr.  Tompkins,  deputy  collector  in  charge 
of  the  public  stores,  may  be  consulted,  volume  2,  pages  13,  28,  31 ;  also 
that  of  William  A.  Darling,  appraiser  general,  volume  2,  pages  077  to 
682. 

For  none  of  these,  or  of  many  other  cases  of  plundering,  can  we  dis- 


XCVIII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


cover  that  any  custom-house  official  has  been  punished.  Indeed,  in  the 
instance  of  W.  D.  Case,  stated  by  B.  G.  Jayne,  special  agent,  at  page 
498,  an  inspector  of  customs,  who  was  caught  in  the  act  of  abstracting 
goods  while  in  the  course  of  transportation,  and  arrested,  the  offender 
was  bailed  by  Mr.  Terwilliger,  confidential  secretary  to  Collector  Mur¬ 
phy,  and  at  once  employed  in  a  different  official  capacity  in  the  custom¬ 
house. 

Thus  we  find  official  crime  to  have  been  rewarded  instead  of  punished. 


IV. 


SEIZURES  AND  COMPROMISES — INFORMERS  AND  TREASURY  AGENTS. 

The  next  subject  of  consideration  by  the  committee  is  referred  to  in 
the  following  resolution : 

And,  also,  to  what  extent  the  practice  of  compromising  with  merchants  defrauding 
or  attempting  to  defraud  the  revenue  has  prevailed,  and  whether  and  to  what  extent 
by  such  compromises  the  amount  of  revenue  due  to  the  United  States  in  such  cases 
has  been  diminished,  and  whether  any  and  what  pecuniary  benefit  has  been  derived 
therefrom  by  the  officers  making  such  compromises. 

The  system  of  seizures  and  subsequent  comjiromises  may  now  be 
considered  in  the  port  of  Hew  York  as  universal.  The  abuses  practiced 
under  this  system  would  seem  almost  incredible.  They  have  become  a 
source,  we  are  satisfied,  not  only  of  great  loss  to  the  revenue,  but  have 
introduced  wide-spread  corruption  and  demoralization  into  all  branches 
of  the  service. 

By  an  act  passed  on  the  2d  of  March,  1799,  a  warrant  was  author¬ 
ized  upon  the  application  of  any  collector,  naval  officer,  or  surveyor, 
who  had  cause  to  suspect  the  concealment  in  any  place  of  goods  upon 
which  the  duties  had  not  been  paid,  to  seize  and  secure  such  goods  for 
trial.  It  was  never  contended  that  this  law  authorized  a  search  for  and 
seizure  of  private  books  and  papers,  to  use  them  as  evidence  to  condemn 
the  property.  It  merely  authorized  the  seizure  of  suspected  property. 

RECENT  ORIGIN  OF  ABUSES. 

In  the  act  of  March  2,  1867,  section  2,  will  be  found  the  authority 
under  which  the  seizure  of  books  and  papers  for  the  purpose  of  discov¬ 
ering  fraud  and  obtaining  evidence  upon  which  the  seizure  of  goods 
supposed  to  be  smuggled  may  subsequently  be  made.  It  is  provided — 

Section  2.  And  be  it  further  enacted ,  That  whenever  it  shall  he  made  to  appear  to  the 
satisfaction  of  the  judge  of  the  district  court  for  any  district  in  the  United  States,  by 
complaint  and  affidavit,  that  any  fraud  on  the  revenue  has  been  committed  by  any 
person  or  persons  interested,  or  in  any  way  engaged,  in  the  importation  or  entry  of 
merchandise  at  any  port  within  such  district,  said  judge  shall  forthwith  issue  his 
warrant,  directed  to  the  marshal  of  the  district,  requiring  said  marshal,  by  himself  or 
deputy,  to  enter  any  place  or  premises  where  any  invoices,  books,  or  papers  are  de¬ 
posited  relating  to  the  merchandise  in  respect  to  which  such  fraud  is  alleged  to  have 
been  committed,  and  to  take  possession  of  such  books  or  papers,  and  produce  them  before 
the  said  judge;  and  any  invoices,  books,  or  papers  so  seized  shall  be  subject  to  the 
order  of  said  judge,  who  shall  allow  the  examination  of  the  same  by  the  collector  of 
customs  of  the  port  into  wliich  the  alleged  fraudulent  importation  shall  have  been 
made,  or  by  any  officer  duly  authorized  by  said  collector.  And  such  invoices,  books, 
or  papers  may  be  retained  by  said  judge  as  long  as  in  his  opinion  the  retention  thereof 
may  be  necessary ;  but  no  warrant  for  such  seizure  shall  be  issued  unless  the  complainant 
shall  set  forth  the  character  of  the  fraud  alleged,  the  nature  of  the  same,  and  the  im¬ 
portations  in  respect  to  which  it  was  committed,  and  the  papers  to  be  seized.  And  the 
warrant  issued  ou  such  complaint,  with  report  of  service  and  proceedings  thereon, 
shall  be  returned  as  other  warrants  to  the  court  of  the  district  within  which  such 
judge  presides. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


XCIX 


GROSS  NATURE  OF  THE  ABUSES —THE  MERCHANT  AT  THE  INFORM¬ 
ER’S  MERCY. 

Under  this  statute,  the  importer  is  placed  completely  at  the  mercy  of^ 
the  informer.  The  statute  is  utterly  indefinite,  and  devoid  of  all  safe¬ 
guards  for  the  rights  of  the  citizen.  Books  and  papers  are  taken  in  a 
most  summary  manner  upon  the  complaint  of  any  person,  and  delivered 
over  upon  the  informal  order  of  a  judge,  to  the  collector  of  the  port,  or, 
as  is  the  practice,  to  any  persons  whom  he  may  designate,  and  who 
commonly  are  found  to  be  the  informers  themselves,  who  are  either  the 
special  agents  of  the  Treasury  Department  or  some  persons  in  their 
employ.  The  books  and  papers  of  a  merchant  so  seized  are  held  as  long 
as  the  judge  shall  deem  necessary.  According  to  the  testimony  taken 
by  this  committee,  at  no  time  has  the  discretion  of  the  judge  overruled 
the  will  and  control  of  the  special  agents  who  had  such  books  and 
papers  in  their  custody.  They  may  be  withheld,  as  they  have  been  with¬ 
held,  until  the  great  loss  and  inconvenience — nay,  impending  ruin — of 
the  merchant  compel  him  to  “  compromise”  and  settle  with  the  officers 
merely  to  regain  possession  of  his  books  and  papers,  and  be  enabled  to 
go  on  with  his  business.  No  provision  is  made  in  the  law  for  the 
amount  of  proof  necessary  *to  be  furnished  of  the  existence  of  the 
fraud,  and  there  is  no  limitation  whatever  as  to  the  books  and  papers 
to  be  seized,  and  no  limitation  of  any  sort,  except  that  they  must 
relate  to  merchandise  in  respect  to  which  fraud  is  alleged. 

OPPRESSIVE  SEIZURE  AND  DETENTION  OF  BOOKS  AND  PAPERS. 

The  affidavits  upon  which  these  “general  warrants”  are  issued  may 
be  made  without  any  personal  knowledge  or  means  of  knowledge,  and 
upon  information  and  belief  only.  This  is  unblushingly  avowed  in  the 
testimony  of  the  various  officials  examined  by  the  committee,  who  are 
the  instruments  of  executing  this  law  for  their  own  gain  and  profit. 
Thus,  a  special  agent  of  the  Treasury  or  any  other  person  may  have 
or  imagine-  some  reason  to  suspect  that  fraud  has  been  committed  upon 
the  revenue,  and  he  may  recklessly  and  without  risk  to  himself  convert 
his  suspicions  into  statements  of  fact  which,  being  related  to  an  informer, 
will  authorize  such  informer,  (no  matter  how  ignorant  of  the  facts  con¬ 
tained  therein,)  upon  the  information  so  conveyed  to  him,  to  make  the 
affida\rit.  Upon  the  ready  approval  of  the  deputy  collector  at  the  head 
of  the  seizure  bureau,  given  as  of  course,  the  warrant  is  allowed,  and  the 
business  of  the  most  reputable  and  extensive  merchants  or  mercantile 
firms  may  be  suddenly  arrested  midway  by  the  seizure  of  every  book 
and  paper  in  their  counting-rooms,  including  the  private  correspondence 
of  the  partners,  and  the  whole  carted  away  without  inventory  or  receipt, 
first  to  the  district  court  room  or  chamber  of  the  judge,  and  then  at  once 
to  the  apartments  of  the  special  agent,  by  whom  they  are  to  be  examined. 
Nay,  in  one  case,  (presently  to  be  referred  to,  which  appears  in  the  accom¬ 
panying  testimony,)  the  formality  of  submitting  the  affidavit  to  the  col¬ 
lector  for  approval  before  the  issuing  of  a  warrant  by  the  judge  was 
entirely  omitted.  But  under  an  affidavit,  sworn  to  by  a  person  upon 
“information  and  belief”  only,  without  any  personal  knowledge  of  the 
facts,  the  books  and  papers  of  one  of  the  oldest,  most  respectable,  and 
largest  importing  firms  of  iron,  steel,  and  their  manufactures  in  the 
United  States,  were  seized  and  kept  in  custody  for  a  period  of  nearly 
six  weeks.  All  this  was  upon  the  allegation  that  an  undervaluation  of 
certain  invoices  had  been  made  by  the  firm,  by  which  duties  to  the 


c 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


amount  of  about  $171  were  alleged  to  have  been  Jost  to  tbe  Government. 
Yet  this  firm,  whose  business  was  so  rudely  and  ruthlessly  arrested 
under  the  cover  of  the  act  of  1867,  was  paying  duties  by  millions  per 
annum  into  the  Treasury.  While  these  books  are  kept  in  the  custody 
of  the  informers,  the  special  agents,  or  the  -custom-house  officials,  there 
are  no  safeguards  to  prevent  their  mutilation  and  erasure,  and  the 
business  secrets  of  the  importer  may  be  opened  to  the  prying  eye  of  any 
rival  in  business  or  any  hostile  party,  and  an  injury  more  deep  than 
the  loss  of  the  money  involved  in  the  claim  may  grow  out  of  such  un¬ 
friendly  inspection. 

Article  four  of  the  amendments  to  the  Constitution  of  the  United 
States  provides,  u  The  right  of  the  people  to  be  secured  in  their  person, 
houses,  business,  and  effects  against  unreasonable  search  and  seizure 
shall  not  be  violated,  and  no  warrant  shall  issue  but  upon  reputed  cause, 
supported  by  oath  or  affirmation  particularly  describing  the  place  to  be 
searched  and  the  person  or  things  to  be  seized.”  The  law  of  1867  is  not 
only,  in  the  opinion  of  the  undersigned,  in  plain  violation  of  the  letter 
and  spirit  of  the  clause  of  the  Constitution  referred  to,  but  the  method  of 
its  execution  by  informers  and  officials  in  New  York  City  is  still  more 
utterly  lawless  and  outrageous.  The  affidavit,  being  upon  u  information 
and  belief”  only,  could  never  subject  the  maker  to  the  penalties  of  per¬ 
jury  even  should  the  facts  disclosed  completely  overthrow  the  charge. 
The  parties  into  whose  hands  the  books,  papers,  and  confidential  corre¬ 
spondence  of  the  merchant  are  thus  delivered,  are  each  and  all  of  them 
parties  directly  in  interest  in  securing  his  conviction.  It  is  their  dis¬ 
cretion  which  gives  access  to  the  books  and  papers ;  it  is  their  sense  of 
propriety  which  protects  the  business  secrets  of  a  firm  ;  it  is  their  will 
and  discretion  which  dictate  the  length  of  time  the  detention  shall  con¬ 
tinue.  The  spectacle  is  thus  presented  of  men  sitting  as  judges  in  their 
own  case.  The  official  upon  whose  ijise  dixit  the  warrant  is  certified  to 
the  district  attorney  for  allowance  is  the  collector  of  the  port.  He  is  a 
sharer  in  the  moiety  of  whatever  may  be  recovered.  The  surveyor  and 
naval  officer  are  his  partners.  The  three  divide  one-fourth  part  of  the 
entire  sum  recovered  ;  the  informer  enjoys  the  other  fourth.  As  the  mat¬ 
ter  is  now  carried  on  in  New  York,  the  head  of  the  seizure  bureau,  Mr. 
S.  G.  Clarke,  the  deputy  collector,  is  likewise  the  recipient  of  commis¬ 
sions  for  the  collection  of  these  moieties.  We  may  add,  the  district 
attorney  receives  2  per  cent,  upon  the  amount  paid  in.  What  would 
be  thought  of  the  judgment  of  a  court  in  which  the  magistrate  was  so 
directly  interested  in  the  result  of  his  own  judgment  ?  Interests  far 
more  remote  and  less  tangible  are  held  every  day  to  disqualify  judges 
from  sitting. 

GENERAL  ROVING  INQUISITION  INTO  THE  MERCHANT’S  BUSINESS. 

Another  monstrous  abuse  growing  out  of  this  practice  and  system  of 
seizure  consists  in  the  fact,  abundantly  proven  by  the  testimony,  that 
while  the  books  of  the  merchant  fail  entirely  to  disclose  any  proof  of 
collusion  oi^  criminality  on  his  part  in  connection  with  the  offense  set 
forth  in  the  affidavit,  yet,  with  unlimited  search  allowed  to  the  officials, 
they  may  ransack  the  details  of  his  entire  business  without  measure  an 
to  time  or  manner  in  order  to  discover  other  causes  of*  complaint.  In 
many  of  the  cases  which  were  before  the  committee  the  facts  proves 
were  those  and  only  those  thus  discovered. 

On  this  subject,  let  B.  G.  Jayne,  special  agent,  speak  for  himself, 
(volume  2,  page  517,  of  the  testimony :) 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Cl 


Q.  Whether  you  ever  made  your  investigation  or  the  discovery  of  one  fraud  the 
basis  of  compelling  settlements  of  others  which  you  did  not  know  of  at  the  time  you 
were  searching  out  the  first  ?— A.  I  will  say  to  the  Senator  very  frankly  that  when  I 
take  the  books  and  papers  called  for  by  the  warrants,  and  when  I  find — if  I  find  any 
kind  of  a  fraud  against  the  revenue — I  should  take  advantage  of  that  fact,  or,  in  other* 
words,  if  I  was  fishing  for  bullheads  and  caught  a  trout,  I  wouldn’t  throw  him  back  in 
the  creek. 

Q.  You  have,  I  think,  put  a  very  proper  simile  in  reference  to  your  business,  that 
you  regard  it  as  fishing  when  you  go  into  a  merchant’s  books  and  papers  ? — A.  Not  at 
all,  sir  ;  I  don’t  go  on  fishing  excursions. 

Q.  Nevertheless,  you  do  fish,  and  catch  other  things  than  you  went  for  ? — A.  If  I  had 
evidence  that  a  fraud  upon  two  importations  of  a  particular  kind  has  been  committed, 
and  in  getting  possession  of  the  man’s  books  and  papers  I  find  that  those  books  dis¬ 
close  that  he  has  committed  the  same  kind  of  frauds  upon  other  importations,  I  cer¬ 
tainly  include  them. 

Q.  You  say,  then,  that  you  never  abandoned  the  first  charge  that  you  seized  the  books 
on  and  took  a  new  one  which  you  discovered  in  the  books  on  one  of  those  fishing  excur¬ 
sions,  as  you  have  described  it  ? — A.  I  have  included  in  the  statement  made  to  the  col¬ 
lector  and  to  the  district  attorney  cases  that  were  not  mentioned  in  the  warrants.  I 
have  done  it  frequently,  I  presume;  how  frequently  I  don’t  know. 

This  man  Jayne  states,  volume  2,  page  490,  that  lie  had  made  thirty-four 
seizures  of  books  and  papers  between  June,  1869,  and  January,  1871,  a 
period  of  eighteen  months.  The  total  amount  paid  into  the  registry 
from  these  suits  is  $017,683.76.  One-half  of  this — $308,481.83 — has 
been  retained  by  the  Government.  Of  the  other  half,  $154,420.94  was 
divided  between  the  collector,  naval  officer,  and  surveyor  of  the  port 
of  New  York.  An  equal  sum  is  the  share  of  the  informer.  It  also 
appears  that  the  duties  upon  the  merchandise  represented  by  these 
figures  would  have  been  $89,225  in  gold,  equal  to  $102,000  in  currency, 
which  certainly  should  have  been  first  deducted  before  the  division  of 
the  proceeds  was  made  between  the  Government  and  the  informers  and 
officers.  But,  according  to  Jayne’s  statement,  he  admits  that,  with  the 
exception  of  the  duties,  amounting  to  $1,000,  on  invoices  valued  at 
$11,000,  no  deduction  for  duties  whatever  was  made  in  favor  of  the  Gov¬ 
ernment.  Thus,  it  appears  that  the  informer’s  moiety  included  over 
$50,000,  which  in  justice  and  right  belonged  to  the  Government,  and 
should  first  have  been  deducted  before  the  division  was  made  of  the 
remainder.  It  will  thus  be  seen  that,  by  the  admission  of  a  single 
special  agent,  and  there  are  seven  in  New  York  alone,  after  deducting 
his  expenses  in  paying  witnesses,  buying  testimony,  and  giving  an 
interest  generally  to  the  officials  around  him,  there  remains  the  hand¬ 
some  profit  to  himself,  personally,  of  $125,000  for  a  year  and  a  half’s 
work,  during  which  he  continued  to  receive,  in  addition,  his^er  diem  as 
an  agent,  and  all  traveling  expenses.  This  statement  of  Jayne  may  be 
considered  a  full  answer  to  the  query  of  the  resolution,  “whether  any  and 
what  pecuniary  benefit  has  been  derived  by  the  officers  making  such 
compromises.77 

A  SPECIMEN  “SEIZURE.” 

A  written  statement  was  prepared  and  read  before  the  committee  by 
Thomas  J.  Hoyt,  of  the  firm  of  Naylor  &  Co.,  whose  testimony  is  to 
be  found  in  volume  2,  pages  166, 167,  &c.,  and  we  here  insert  it  as  a  true 
description  of  the  modus  operandi  of  these  cases,  though  it  is  one  in 
which  the  features  of  outrage  and  oppression  are  not  as  much  intensified 
as  in  other  cases  brought  before  us : 

“A  strange  story  of  official  outrages. — On  the  afternoon  of  September  7, 
1871,  our  counting-liouse  was  entered  by  a  deputy  United  States  marshal  and  sev¬ 
eral  persons,  including  four  special  agents  of  the  Treasury,  who  forthwith  occupied 
our  desks,  opened  and  examined,  and  threatened  to  remove  indiscriminately,  all  tho 
books  and  papers  they  could  lay  their  hands  on.  Tho  authority  was  a  warrant  issued 
on  tho  affidavit  of  George  Browne,  Treasury  special  agent,  to  the  effect  that  we  had 
fraudulently  undervalued  steel  rails  and  fish-plates  to  the  extent  of  at  least  10  per 


on 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


cent.,  specifying  five  invoices  of  the  same.  George  Browne  hacl  no  qualifications  what¬ 
ever  for  forming  an  opinion  on  the  subject.  Steel  rails  are  a  well-known  article  of 
commerce,  whose  value  was  well  known  to  the  customs  authority,  and  a  fraudulent 
undervaluation  of  them  was  practically  impossible.  Rather  than  permit  all  our  books 
and  papers  to  be  taken  away,  and  our  business  entirely  stopped,  we  allowed  the  ex¬ 
aminers  to  investigate  the  matter  in  our  office.  We  endured  their  presence  for  five 
weeks,  during  which  time  our  business  was  so  seriously  interrupted  that  it  would  be 
impossible  to  estimate  the  magnitude  of  the  loss,  but  we  cau  safely  say  that,  inde¬ 
pendent  of  the  expense  to  which  we  were  subjected  for  counsel-fees  and  for  the  charges 
of  two  keepers,  who  were  left  by  the  United  States  marshal  in  our  premises,  day  and 
night,  all  the  time,  our  pecuniary  loss  by  this  practical  suspension  of  business  for  five 
weeks  amounted  to  a  very  great  sum.  And  if  we  had  not  been  perfectly  innocent 
and  determined  not  to  submit  to  extortion,  it  would  have  been  a  politic  course  to  pay 
$50,000  or  even  $100,000  to  avoid  the  losses  and  injuries  resulting  from  this  proceed¬ 
ing.  We  in  vain  made  the  most  effort  to  induce  the  rendering  a  report  to  the  Secretary 
of  the  Treasury.  This  report  had  been  called  for  by  the  Department,  had  been  systemati¬ 
cally  postponed,  and  promised  again  and  again,  from  time  to  time ;  and  when  at  length 
the  positive  time  was  fixed,  and  Colonel  Howe  had  agreed  to  call  at  our  office  and  read 
his  report,  so  that  we  might  understand  the  real  character  of  the  charge,  instead  of 
comiug  himself,  he  sent  a  note,  instructing  the  examiners  to  enter  our  safe,  examine  the 
private  drawers  of  partners  and  others,  on  the  ground  that  they  might  contain  evidence 
bearing  on  the  charge  made  against  us.  While  debating  this  point,  one  of  the  exam¬ 
iners  took  me  aside,  and  whispered  a  suggestion,  that  1  had  better  at  once  go  down 
and  see  Colonel  Frank  E.  Howe,  the  chief  of  the  bureau ;  which  I  did,  and  after  some 
conversation  regarding  the  proposed  examination  of  our  safe,  Colonel  Howe  exhibited 
a  paper,  which  he  said  showed  that  Naylor  &  Co.  owed  the  Government  $84,000,  but 
that  there  was  a  way  to  fix  the  whole  matter,  and  save  my  firm  and  himself  all  further 
trouble,  and  that  was  by  a  compromise.  Colonel  Howe  then  said  he  was  prepared  to 
settle  the  matter  for  $50,000.  Such  proposition  we  never  contemplated  for  a  moment, 
either  making  or  accepting,  and  of  course  declined  Colonel  Howe’s  proposal.  We  then 
determined  to  no  longer  sulfer  this  oppression  if  there  were  any  legal  means  by  which 
it  could  be  stopped,  and  to  this  end  we  made  application  to  the  United  States  district 
court  to  require  Mr.  George  Browne  to  show  cause  why  the  examination  should  not 
cease,  and  an  order  to  that  effect  was  issued.  We  then  informed  the  Secretary  of  the 
Treasury  of  these  proceedings,  and,  on  the  following  Saturday,  when  the  argument 
was  to  be  heard  in  court,  the  district  attorney  applied  for  postponement,  which  was 
granted,  on  condition  that  the  examination  should  cease;  and  very  soon  afterward  the 
Secretary  of  the  Treasury  instructed  the  collector  to  take  charge  of  the  matter,  and  a 
final  order  was  then  entered  dismissing  the  warrant ;  the  examiners  taking  with  them 
copies  from  our  books  and  correspondence,  which  our  counsel  certified.” 

Witness.  I  would  like  to  read  here  the  affidavit  of  Mr.  George  Browne.  It  is  a 
printed  form,  as  the  committee  can  see,  and  very  little  writing  about  it : 

Affidavit. 

[“No.  457,  Form  1.] 

“  District  court  of  the  United  States  for  the  southern  district  of  New  York. 

“  To  the  Honorable  Samuel  Blatchford, 

“  United  States  District  Judge  for  the  Southern  District  of  New  York  : 

u  The  complaint  of  George  Browne,  residing  at  Staten  Island,  in  the  State  of  New 
York,  respectfully  shows,  upon  information  and  belief,  that  Naylor  &  Co.,  doing  busi¬ 
ness  at  99  John  street,  in  the  city  and  county  of  New  York,  and  within  the  jurisdiction 
of  this  court,  engaged  in  the  importation  and  entry  of  merchandise,  at  the  port  of  New 
York,  within  said  southern  district  of  New  York  ;  that  said  Naylor  &  Co.  have  for 
some  time  past,  and  now  are,  engaged,  as  this  complainant  and  deponent  is  informed 
and  believes,  in  bringing  into  said  port  foreign  merchandise,  and  have  entered  the 
same  at  the  custom-house  at  said  port,  upon  and  by  means  of  invoices,  in  which  the 
cost  and  value  of  said  merchandise  is  falsely  and  fraudulently  undervalued,  to  wit,  at 
least  10  per  cent. ;  that  a  portion  of  said  merchandise  was  steel  rails  and  fish-plates, 
and  marked — 

“  C,  2,238,  imported  by  the  Hattie  G.  Hull,  January  7,  1869. 

“<(B^>  5,020,  imported  by  the  New  World,  March  23,  1869. 

“  239,  imported  by  the  Sorinto,  March  13,  1869. 

“<^09^>  imported  by  the  Denmark,  March  9,  1870. 

“<^296]>  imported  by  the  France,  April  19,  1870. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CIII 


“  That  the  values  of  the  merchandise  entered  as  aforesaid  are  stated  in  said  invoices 
and  entries  at  a  price  or  value  much  less  than  the  actual  cost  or  value  of  the  same  at 
the  place  of  exportation,  in  violation  of  the  laws  of  the  United  States. 

“  That  the  account-books,  invoices,  letter-books,  ledgers,  and  correspondence  of  said 
Naylor  As  Co.,  relating  to,  and  in  which  said  importations  or  any  of  them  are  entered*, 
and  the  accounts  thereof  are  in  any  manner  posted  or  kept  or  referred  to,  will  show 
said  fraudulent  undervaluation,  as  this  deponent  and  complainant  is  informed  and 
verily  believes. 

“  GEO.  BROWNE. 


“  Southern  District  of  New  York, 

“  City  and  County  of  A Tew  Yorlc,  ss : 

“  George  Browne,  being  duly  sworn,  says  that  the  foregoing  declaration  or  complaint 
is  true  of  his  own  knowledge,  except  as  to  the  matters  therein  stated  on  his  informa¬ 
tion  and  belief,  and  as  to  those  matters  he  believes  it  to  be  true. 

“  GEO.  BROWNE. 

“  Sworn  to  before  me  this  5th  day  of  September,  1871. 

“JOHN  A.  OSBORN, 

“  United  States  Commissioner .” 

By  Mr.  Bayard  : 

Q.  There  is  nothing  in  that  affidavit,  I  see,  except  on  this  man’s  information  and 
belief? — A.  That  is  all. 

Q.  The  sources  of  which  he  does  not  furnish  ? — A.  He  has  only  specified  five  invoices 
of  1869  and  1870.  Then  Judge  Blatchford  issued  this  warrant,  which  simply  rehearses 
what  I  read  to  you  in  the  affidavit : 

judge’s  warrant. 

“[No.  458,  Form  2.] 

“  The  President  of  the  United  States  of  America  to  the  marshal  of  the  United  States 
for  the  southern  district  of  New  York : 

“It  being  made  to  appear  to  my  satisfaction,  by  the  complaint  and  affidavit  of 
George  Browne,  that  frauds  on  the  revenue  have  been  committed  by  Naylor  &  Co., 
doing  business  at  99  John  street,  in  the  city  of  New  York,  engaged  in  the  importation 
and  entry  of  merchandise  at  the  port  of  New  York,  within  the  southern  district  of  New 
York,  which  complaint  and  affidavit  sets  forth  as  the  character  of  said  frauds,  and  the 
nature  of  the  same,  and  the  importation  in  respect  to  which  they  were  committed,  that 
said  frauds  consisted  in  entering  at  the  custom-house  at  said  port  merchandise,  steel 
rails,  and  fish-plates,  and  marked  — 


“C,  2,238,  imported  by  the  Hattie  G.  Hull,  January  7,  1869 
“<(B)>  5,020,  imported  by  the  New  World,  March  23, 1869. 

“ <B)> 239,  imported  by  the  Sorinto,  March  13, 1869. 
“<^309^>  imported  by  the  Denmark,  March  19,  1869. 
“<^296]>  imported  by  the  France,  April  19,  1870 — 


/ 


“At  values  in  the  invoices,  upon  and  by  means  of  which  the  entries  of  said  mer¬ 
chandise  were  made  greatly  less  than  the  actual  cost  or  value  of  the  same  at  the  place 
of  exportation,  in  violation  of  the  laws  of  the  .United  States,  and  which  complaint 
and  affidavit  set  forth  that  the  account-books,  invoices,  and  correspondence  of  said 
Naylor  &  Co.  relating  to,  and  in  which  said  importations  are  entered,  or  any  of  them, 
and  the  accounts  thereof  are  in  any  manner  posted  or  kept,  will  show  said  fraudu¬ 
lent  undervaluation.  Now,  therefore,  under  and  by  virtue  of  the  power  vested  in  me 
by  the  second  section  of  the  act  of  Congress  approved  March  2,  1866,  entitled  ‘An  act 
to  regulate  the  disposition  of  the  proceeds  of  fines,  penalties,  and  forfeitures  incurred 
under  the  laws  relating  to  the  customs,  and  for  other  purposes,’  I,  Samuel  Blatchford, 
judge  of  the  district  court  of  the  United  States  for  the  southern  district  of  New  York, 
do  hereby  require  you,  by  yourself  or  deputy,  to  enter  any  place  or  premises  where 
any  of  said  account-books,  invoices,  or  correspondence  are  deposited  relating  to  said 
merchandise,  and  to  take  possession  of  said  account-books,  invoices,  and  correspond¬ 
ence,  and  produce  them  before  me  as  soon  as  you  shall  have  taken  possession  of  the 
same ;  and  do  command  you  that  you  return  this  warrant,  with  report  of  service  and 


CIV 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


proceedings  tliereon,  to  the  district  court  of  the  United  States  for  the  southern  district 
of  New  York,  at  the  court-room  thereof,  in  the  city  of  New  York,  at  the  opening  of 
court,  on  the  first  day  the  said  court  shall  he  in 'session  after  you  shall  have  taken 
possession  of  said  account-hooks,  invoices,  and  correspondence. 

“  Witness  my  hand  and  the  seal  of  said  court,  at  the  city  of  New  York,  this  sixth 
day  of  September,  in  the  year  of  our  Lord  one  thousand  eight  hundred  and  seventy- 


[seal.J 


“  Attest : 


“SAM.  BLATCHFORD, 

11  Judge  of  the  District,  Court  of  the  United  States 
“ for  the  Southern  District  of  Neiv  Fork. 


“GEO.  F.  BETTS, 

^  J/1 

“NOAH  DAVIS, 

“  United  States  Attorney 


Witness.  I  would  like  to  read  this  letter,  as  it  explains  what  follows  : 


“  99  &  101  John  Street, 

11  New  York,  December  8,  1871. 

“  Dear  Sir  :  Mr.  Vose  called  on  the  5th  on  Hon.  Noah  Davis,  the  United  States  dis¬ 
trict  attorney,  to  whom  our  custom-house  case  has  been  referred,  and  was  told  that  he 
wanted  proof  of  the  correctness  of  the  invoices  specified  in  the  three  schedules,  of  which 
we  inclose  copies. 

“Mr.  Vose  felt  justified  in  assuming  that,  as  to  all  the  other  matter  complained  of  by 
the  examiners,  the  district  attorney  saw  no  ground  for  suit,  and  that  the  charges  con¬ 
tained  in  pages  14,  18,  and  32,  of  the  tabular  statements  furnished  to  him,  would  also 
be  dismissed  if  satisfactory  proofs  should  be  furnished,  by  extracts  from  the  entries  on 
your  b'ooks,  that  the  goods  in  question  were  charged  to  and  paid  for  by  you  at  the  same 
rate  as  entered  at  the  custom-house.  If  you  can  supply  this  proof,  we  should  like  to 
furnish  it  and  to  have  also  extracts  from  the  books  of  the  Atlas  Steel  Works,  of  the 
original  charges  to  you  of  the  same  goods,  if  you  can  obtain  them. 

“  As  we  understand  it,  no  lengthy  deposition  is  necessary,  but  simply  true  copies  of 
the  original  book  entries  of  the  respective  firms,  made  at  the  time  the  goods  were  sold 
and  delivered,  such  copies  to  be  verified  by  oath,  attesting  to  the  genuineness  thereof. 

“We  believe  the  district  attorney’s  request  leaves  it  optional  with  us  to  furnish 
extracts,  either  from  your  books  or  from  Messrs.  John  Brown  &  Co.’s,  but  we  should 
like  to  have  both  if  convenient. 

“  Yours,  very  truly, 

“NAYLOR  &  CO., 

“  Neiv  York. 


“  Messrs.  Naylor,  Brazon  &  Co., 

“  London.” 


By  Mr.  Bayard  : 

Q.  What  are  the  Atlas  Steel  Works  referred  to  there? — A.  They  are  the  manufactu¬ 
rers  of  the  steel  rails  that  we  import — Sir  John  Brown’s  works,  in  Sheffield. 

Q.  Does  your  statement  express  anywhere  what  was  the  whole  amount? — A.  Yes, 
sir;  I  am  coming  to  that.  The  district  attorney  approved  of  this  letter,  the  committee 
will  please  understand;  it  was  read  to  him  by  our  attorney,  being  mailed  after  it  had 
met  with  his  approval.  There  are  only  three  pages  of  the  invoice  spoken  of,  and  I 
will  tell  you  about  this  in  what  follows  :  “Thus  it  appears  that  the  only  items  deemed 
worthy  of  consideration  by  the  district  attorney  are  eight  invoices  of  steel  fish-plates.” 
Perhaps  it  is  better  to  explain  to  the  committee.  You  all  know  what  a  steel  rail  is, 
but  very  few  know  what  a  fish-plate  is;  it  is  a  sma.ll  bar,  about  a  foot  and  a  half  or 
two  feet  loug,  that  joins  the  ends  of  t^e  rails  together;  it  is  but  a  small  piece  of  metal 
by  the  side  of  a  steel  rail. 

[The  witness  concluded  the  reading  of  his  statement  as  follows:] 

“Six  weeks  thereafter  the  collector  sent  to  the  district  attorney  the  report  and  a  tab¬ 
ulated  statement  of  charges  which  we  had  been  so  long  seeking,  and  it  appears  that 
the  only  items  deemed  worthy  of  consideration  by  the  district  attorney  are  eight  in¬ 
voices  of  steel  fish-plates,  on  which  the  difference  between  the  duty  actually  paid  and 
that  which,  upon  the  assumption  of  the  examiners,  should  have  been  paid,  amounts  to 
$176;  and  not  one  of  these  invoices  was  included  among  those  specified  in  the  affidavit 
and  warrant;  so  that,  in  point  of  fact,  all  the  charges  upon  which  the  seizure  of  our  books 
was  based  were  practically  dismissed  by  the  district  attorney.  As  an  instance  of  the 
evil  working  of  the  existing  system,  we  deem  it  proper  to  call  attention  to  the  fact 
that  a  set  of  irresponsible  and  inexpert  subordinate  officials  have  arrogated  to  them- 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CV 


selves  the  practical  revision  and  reversal  of  the  decision  of  the  appraiser’s  department, 
and,  availing  themselves  of  the  rigorous  provisions  of  the  act  of  March  2,  1867,  are 
accustomed  to  swear  out  warrants  which,  by  the  practice  of  the  courts  in  issuing  them 
upon  printed  forms  of  affidavits,  framed  in  bare  compliance  with  the  law,  without  any 
corroborated  testimony  and  without  properly  specifying  the  documents  to  be  taken, 
become  in  effect  general  search-warrants,  repugnant  alike  to  the  Constitution  and  the 
liberties  of  the  citizen,  and  are  issued,  as  illustrated  in  our  own  case,  without  any  re¬ 
gard  to  the  probabilities  or  necessities  of  the  case,  the  character  of  the  frauds  charged, 
or  of  the  parties  implicated,  and  are  unnecessarily  harsh,  affecting  the  innocent  as  se¬ 
riously  as  the  guilty.” 

The  Witness.  That  is  a  statement  of  our  case  from  the  dawn — the  history  of  it 
at  least,  and  I  put  it  in  that  form  because  I  put  it  fully  before  you. 

By  Mr.  Casserly  : 

Q.  Your  business  is  extensive,  I  judge? — A.  Yes,  sir;  we  have  three  houses  in  this 
country  and  two  in  England,  and  we  have  a  very  large  mill  in  Boston. 

Q.  What  was  the  extent  of  your  business,  say  last  year? — A.  Our  business  was  in 
the  neighborhood  of  $12,000,000. 

Q.  Your  him  has  been  in  existence  in  this  country  over  forty  years? — A.  From  forty 
to  fifty  years. 

Q.  And  in  England  and  in  this  country  nearly  eighty  years? — A.  About  seventy 
years. 

Q.  It  would  hardly  pay  you  very  well,  I  should  think,  to  run  such  a  risk  as  these 
proceedings  entailed  upon  you  for  the  sake  of  $176  ? — A.  No,  sir. 

Q.  Even  if  you  had  been  so  disposed? — A.  Certainly  not. 

Q.  You  spoke  of  one  or  two  former  matters,  in  which  you  had  to  obtain  an  adjudica¬ 
tion  by  the  Treasury. — A.  Yes,  sir. 

Q.  Have  you  got  "the  decision  of  the  Treasury  in  both  those  cases? — A.  I  have,  sir, 
in  both  cases. 

Q.  I  will  ask  to  have  them  made  exhibits;  you  probably  desire  it? — A.  I  should  like 
to  have  them.  They  are,  of  course,  on  file  in  the  Treasury  Department,  both  these 
decisions.  But  these  copies  are  at  the  service  of  the  committee.  [See  exhibits  at  close 
of  Mr.  Hoyt’s  testimony.] 

Q.  Have  you  ever  had  any  other  question  than  upon  those  two  cases  with  the  Treas¬ 
ury? — A.  No,  sir. 

Q.  Or  with  the  custom-house  here? — A.  No,  sir. 

Q.  In  regard  to  the  entire  regularity  of  your  proceedings  as  importers? — A.  None  at 
all;  on  the  coutrary,  we  have  in  a  measure  been  a  source  of  reference  for  custom¬ 
house  authorities  here  on  questions  of  the  construction  of  the  laws  of  revenue.  At 
different  times  they  have  been  iu  the  habit  of  coming  to  our  office,  to  ask  a  question 
in  regard  to  the  construction  of  the  revenue  laws  and  so  on. 

By  Mr.  Bayard  : 

Q.  To  assist  them  by  comparison  of  their  views  with  yours  ? — A.  Yes,  sir. 

By  Mr.  Casserly  : 

Q.  Then,  in  over  forty  years,  you  never  have  had  but  these  two  questions,  both  of 
which  the  Treasury  decided  in  your  favor? — A.  Yes,  sir. 

Q.  How  have  your  invoices  stood  in  the  custom-house  during  that  period? — A.  I 
think  you  will  find  by  inquiry  at  the  custom-house  that  our  invoices  have  always 
stood  as  high  if  not  higher  than  those  of  other  importers;  higher  than  probably  there 
was  really  any  necessity  for.  As  I  have  stated  in  this  paper,  always  where  there  has 
been  a  doubt,  we  have  giveu  the  benefit  of  it  to  the  Government. 

Q.  You  have  been  careful  to  have  your  invoices  state  such  prices  as  were  rather  in 
favor  of  the  Government,  in  all  cases,  than  otherwise? — A.  We  have,  sir. 

*  #  #  *  *  *  * 

# 

By  Mr.  Casserly  : 

Q.  Did  your  case  excite  a  good  deal  of  indignation  and  surprise  among  your  associ¬ 
ates  and  commercial  men  ? — A.  We  endeavored  to  keep  it  as  quiet  as  we  could,  from 
the  shame  and  mortification  we  all  felt,  that  our  house,  after  having  been  in  business 
as  long  as  we  have,  should  have  five  or  six  men  to  bo  sitting  there  in  possession  of  our 
books  and  papers  week  after  week.  We  didn’t  like  it  to  be  known  among  the  brokers. 
It  was  always  a  source  of  great  mortification  to  us.  If  a  customer  came  in  to  settle 
his  account,  we  had  to  give  notice,  and  ask  permission  of  one  of  the  examiners  to  see 
what  he  owed  us.  The  men  were  there  walking  through  the  office  with  their  hats  on, 
smoking;  and  brokers  accustomed  to  come  iu  our  office  knew  very  well  they  were  not 
attached  to  our  business  at  all,  and  would  naturally  ask  questions.  One  man  was 
always  kept  sitting  in  the  outer  office,  opposite  the  Kate. 

Q.  One  of  these  officers  ? — A.  Deputies.  • 


CVI 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Q.  Was  their  demeanor  at  all  times  of  this  disrespectful  and  rude  character  ? — A. 
No,  sir ;  there  were  times  when  these  men  were  pretty  pleasant. 

Q.  They  would  condescend,  at  times,  to  he  civil  ? — A.  Yes,  sir. 

Q.  Have  you  ever  before  heard  of  many  similar  cases — cases  of  like  character  ? — A. 
Yes,  sir,  we  have. 

Q.  Do  you  believe  that  many  other  houses  of  respectability  have  suffered  by  this 
system  ? — A.  I  think  they  have. 

Q.  I  believe  your  house  is  a  wealthy  one  ? — A.  Yes. 

Q.  Take  that  as  a  fact.  Suppose  a  house  of  small  means,  of  restricted  resources, 
had  been  subjected  to  such  a  seizure  as  this,  under  similar  circumstances  in  all  respects, 
would  the  house  have  been  able  to  stand  it  financially  ?  What  would  have  been  the 
effect  upon  it  pecuniarily  ? — A.  Do  you  meau  stopping  their  business  ? 

Q.  And  affecting  their  credit ;  whether  it  would  or  would  not  have  broken  them 
down. — A.  I  think  it  would  have  gone  very  far  toward  it.  I  think  it  would  have  in¬ 
jured  their  credit  to  such  an  extent — it  would  have  gone  very  far  to  break  them  down. 
The  necessities  of  their  business,  coupled  with  that,  I  think,  would  go  very  far. 

Q.  Have  you  or  not  heard  in  the  community  of  cases  where  the  parties,  subjected  to 
this  treatment,  have  yielded  to  the  demands  of  these  agents,  and  made  settlements 
where  they  were  conscious  of  having  intended  or  committed  no  wrong  against  the 
Government  of  the  United  States?— A.  We  have  heard  of  such  cases  where  settle¬ 
ments  have  been  made  by  parties  whose  former  respectability,  position,  and  character 
would  lead  us  to  suppose  they  had  no  reason  for  a  settlement  of  a  fraudulent  character, 
but  settled  to  get  rid  of  the  annoyance  and  trouble  of  an  examination. 

******* 

By  Mr.  Pratt  : 

Q.  You  speak  about  the  extent  of  your  loss ;  that  it  would  have  been  politic  for 
your  firm  to  have  paid  $50,000,  or  even  the  $100,000,  to  have  prevented  this  seizure  ? — 
A.  Yes. 

Q.  How  do  you  get  at  that  result  ? — A.  We  get  at  it  simply  by  the  fact  that  during 
this  time  our  business  was  interrupted  in  the  selling  department ;  that  x>urchasers 
went  away,  we  know  from  our  London  house  and  our  correspondents  in  England,  as 
well  as  specially  in  this  country ;  and  had  our  usual  run  of  business  gone  on,  we  should 
have  made  very  heavy  sales.  That  is  a  very  low  estimate ;  fifty  or  one  hundred  thou¬ 
sand  dollars  was  not  half;  it  was  a  very  small  part;  I,  myself,  think  it  was  not  half 
the  loss  we  suffered. 

Q.  Did  you  miss  any  sales  you  would  have  made  but  for  that  seizure  of  your  papers  ? 
— A.  Unquestionably. 

Q.  Did  you  fail  to  collect  any  debts  due,  by  the  seizure  of  your  papers  ? — A.  No,  I 
think  not. 

Q.  What  do  the  sales  of  your  house  amount  to  per  annum  ? — A.  About  twelve  mil¬ 
lions,  in  gold. 

Q.  This  seizure  occurred  in  1871,  in  September? — A.  Yes. 

Q.  This  seizure  extended  from  the  7th  of  September,  1871,  for  about  five  weeks? — A. 
Yes. 

Q.  How  did  the  sales  of  that  period — September  and  October,  1871 — compare  with 
the  like  period  the  year  previous ;  were  they  less  ? — A.  Very  much  less. 

Q.  And  you  attribute  that  fact  to  the  interference  with  your  business? — A.  Yes. 

Judge  Davis,  tlie  United  States  district  attorney,  was  examined  soon 
after  Colonel  Hoyt.  (Volume  1,  page  181.)  He  corroborated  the  latter’s 
testimony  as  to  the  points  that,  after  hearing  Naylor  &  Co.,  the  complaint 
had  been  dismissed  as  to  all  but  three  invoices,  on  which  the  duties  in 
dispute  amounted  to  but  $171.  None  of  these  invoices  were  specified 
in  the  affidavit  or  warrant.  As  to  them,  the  district  attorney  retained 
the  case,  but  gave  time  to  Naylor  &  Co.  to  obtain  the  necessary  explana¬ 
tions  from  their  English  house. 

EVILS  OF  MOIETIES. 

This  system  of  division  of  fines,  forfeitures,  and  penalties  among  the 
officers  of  the  revenue  has,  we  repeat,  a  most  demoralizing  influence. 
In  the  first  place,  the  necessary  result  is  that  the  efforts  of  the  officers 
are  never  directed  to  the  discovery  and  prevention  of  fraud,  but  their 
interests  naturally  lead  them  to  encourage  the  commission  of  fraud,  in 
order  to  seize  upon  the  fruits  of  its  accomplishment.  If  the  ounce  of 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CVII 


prevention  is  worth  the  pound  of  cure  in  any  case,  in  none  would  the 
maxim  apply  so  strongly  as  in  these  alleged  frauds  upon  the  revenue. 

An  important  fact  bearing  upon  this  view  and  appearing  from  this 
testimony  (see  deposition  of  District  Attorney  Davis,  page  181,  &c. ;  of 
Jayne,  volume  2,  page  517,  and  others)  is  that,  upon  a  settlement  and 
compromise  being  effected  between  the  alleged  delinquent  and  the  Gov¬ 
ernment  officials,  the  payment  of  the  sum  agreed  upon  clears  the  trans¬ 
gressor  from  all  criminal  prosecution  or  penalties.  Laws  to  protect  the 
revenue  are  abundantly  provided  with  penal  clauses.  Fine  and  imprison¬ 
ment  in  severe  proportions  are  leveled  against  the  offender.  But,  under 
this  system  of  settlement  and  compromise,  the  payment  of  money  com¬ 
pounds  the  felony  or  misdemeanor. 

CRIMES  AGAINST  THE  REVENUE  ENCOURAGED. 

To  accomplish  fraud  upon  the  revenue  by  smuggling,  by  under¬ 
valuation,  or  any  other  mode,  generally  involves  the  crime  of  perjury, 
or  subornation  of  perjury,  which  is  felony,  and  yet  the  payment  of 
money  releases  the  offender  from  the  results  of  his  crime.  What  would 
be  thought  of  the  administration  of  law  which  permitted  a  forger  to  go 
free  upon  repaying  the  amount  he  had  gained  by  the  commission  of  his 
crime?  How  would  counterfeiting  be  stopped  if  the  false  money  could 
be  redeemed  by  good  and  the  offense  wiped  out  ?  Or  if  the  robber,  who 
was  caught  coming  from  your  premises  with  his  plunder,  should  relin¬ 
quish  his  basket  of  plate,  and  go  unwhipped  of  justice?  Yet  such  is 
precisely  the  present  system  of  disposing  of  highly  penal  offenses  against 
the  revenue.  Such  is  the  result  and  consequence  of  settlement  and 
compromise  for  offenses  for  violations  of  the  revenue  laws,  as  sys¬ 
tematically  conducted  by  United  States  Treasury  agents,  district  attor¬ 
neys,  informers,  and  seizure-bureau  officials.  Who  can  doubt  that 
one  resolute  prosecution  to  conviction,  the  presence  of  one  dishonest 
importing  merchant  in  the  prisoner’s  dock,  the  consignment  of  one  such 
criminal  to  the  penitentiary  of  the  State,  would  do  more  to  reform  abuses 
and  discourage  frauds  upon  the  revenue  than  a  thousand  compromises 
and  settlements  ? 

When,  therefore,  parade  is  made  of  the  large  amount  obtained  to  the 
Government  by  means  of  the  system  of  moieties  and  prosecutions  by 
informers,  let  it  not  be  forgotten  that  one-tenth  of  the  sum  honestly 
spent  in  preventing  the  crime  would  bring  far  greater  sums  into  the 
public  Treasury  and  introduce  a  far  higher  tone  of  morals  in  the  public 
service.  Who  can  estimate  the  amount  of  undiscovered  frauds  and  their 
cost  to  the  Government?  The  object  of  the  informer  being  gain  alone, 
a  bribe  of  superior  dimensions  to  the  informer’s  share  would  at  any  time 
secure  his  silence  and  perhaps  connivance.  When  a  Government  relies 
upon  nothing  higher  than  the  love  of  money  in  its  public  service,  it  may 
well  doubt  the  security  of  its  revenues.  On  the  score  of  civil  economy, 
therefore,  we  believe  that  the  system  of  moieties  to  informers  is  practi¬ 
cally  of  great  and  incalculable  disadvantage.  We  trust  that  the  same 
sound  views  which  have  led  to  the  abolition  of  the  moiety  system  in  the 
Internal  Revenue  Department  of  the  Government  may  be  followed  in  re¬ 
spect  to  customs  duties.  What  is  true  in  the  one  case  is  equally  so  in  the 
other.  If  a  reasonable  fund  could  be  placed  in  the  hands  of  the  Sec¬ 
retary  of  the  Treasury,  as  it  is  now  in  the  hands  of  the  Commissioner  of 
Internal  Revenue,  to  enable  him  to  stimulate  by  discreet  and  well-timed 
rewards  the  prevention  and  discovery  of  fraud  upon  the  revenue  and  a 
steady  and  unrelenting  prosecution  of  the  offender  to  conviction,  it  can- 
S.  Rep.  227 - ix 


CVIII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


not  be  doubt  ed  that  not  only  the  pecuniary  interests  of  the  public  would 
be  advanced,  but  that  a  dangerous  and  demoralizing  system  would  be 
extirpated. 

Opposition  will,  of  course,  be  made  to  such  an  important  reform  of  an 
abuse  so  intrenched  in  its  large  profits  and  length  of  existence,  by  all 
the  parties  who  have  fattened  upon  it.  The  collectors,  surveyors,  naval 
officers,  and  the  special  agents,  and  their  personal  and  political  friends, 
will  join  in  powerful  and  effective  combinations  to  prevent  any  such  re¬ 
form.  An  instance  of  this  we  now  witness  in  the  obstructions  iu  the 
Senate  to  the  passage  of  a  bill  very  moderately  rectifying  the  present 
system  of  seizures  of  books  and  papers,  which  has  passed  the  House,  and 
which  seems  destined,  we  fear,  tube  defeated  in  the  Senate  at  the  pres¬ 
ent  session.  But  an  examination  of  the  system  will,  we  think,  convince 
any  reasonable  and  just-minded  man  that  it  should  be  abolished  with¬ 
out  delay. 

The  views  here  presented  are  not  novel,  but  have  been  laid  before 
Congress  u£>on  former  occasions. 

EXTRAVAGANT  GAINS  OF  OFFICIALS. 

The  report  of  the  Committee  on  Public  Expenditures  in  relation  to 
affairs  at  the  New  York  custom-house,  made  in  18G7,  to  which  we  have 
already  referred,  contains,  at  pages  14  and  15,  the  following: 

In  New  York  the  committee  found  that  it  was  a  habit  of  the  collector  to  consent  to 
the  delivery  of  merchandise  under  seizure  to  the  importer  upon  a  payment  of  a  certain 
sum,  which  sum  included  an  amount  for  duties  the  attempt  to  evade  the  payment 
which  constituted  the  fraud  which  led  to  the  seizure.  It  is  then  the  practice  of  the  col¬ 
lector  not  to  deduct  from  the  sum  received  in  settlement  the  amount  of  duty  and  de¬ 
posit  the  same  with  the  Treasury,  and  then  divide  the  remainder,  but  to  divide  the  whole 
gross  sum.  The  committee,  therefore,  urgently  recommend  that  provision  shall  be 
made  by  law  that  in  no  case  shall  there  be  a  settlement  of  any  fraud  upon  the  revenue 
which  does  not  contemplate,  first  of  all,  a  payment  into  the  Treasury  of  the  full  amount 
of  duty  which  has  been  evaded  or  withheld.  * 

But  to  return  to  the  merchant  whose  store,  goods,  and  papers  have  been  seized.  He 
knows  that  his  credit  is  injured  once  is  it  whispered  in  Wall  street  that  he  is  in  diffi¬ 
culty  with  the  custom-house ;  he  knows,  too,  that  if  the  report  of  such  an  imbroglio 
gets  abroad,  his  foreign  credit  is  impaired,  if  not  destroyed.  He  knows,  too,  that  with' 
out  the  possession  of  his  store  he  cannot  sell  his  goods  and  meet  his  paper.  He  knows, 
too,  that  without  his  books  and  papers  he  cannot  arrange  his  balances  or  make  his  col¬ 
lections.  In  this  garroting  grip,  therefore,  often  it  is  simply  a  question  with  him, 
“  Shall  I  give  up  a  part  and  save  something,  or  stand  and  contend,  not  with  the  harp¬ 
ies  of  the  law,  not  with  the  mere  minions  of  office,  but  with  the  myrmidons  of  the 
Government  itself  f 7  Is  it  any  wonder,  then,  that,  though  conscious  of  no  wrong,  of 
perfect  rectitude  of  intentions,  when  brought  into  the  dissecting-room  of  the  seizure 
bureau,  he  surceases  opposition,  allows  the  flesh-pounds,  blood  and  all,  to  be  taken, 
and  goes  out,  perchance,  not  a  malcontent,  but  with  new  views  of  the  laws  and  justice 
of  his  country  ?  The  returns  or  dividends  secured  by  the  operations  of  this  seizure  bureau 
have  been  large  indeed — sufficiently,  it  would  seem,  to  enable  the  participants  to  disre¬ 
gard  the  obloquy  engendered  by  their  proceedings. 

Mr.  Ogden,  auditor  of  the  custom-house,  on  request,  furnished  figures  that  give  some 
idea  of  the  extent  of  these  amercements. 

Mr.  Dennison,  naval  officer  a  little  over  four  years,  exclusive  of  a  large  annual  salary, 
received  for  fines,  penalties,  &c.,  $114,704. 27.  It  is  said  he  has  a  divisible  interest  in 
seizure  cases  and  trials,  contingent  upon  their  adjustment  and  determination,  amount¬ 
ing  to  over  $300,000. 

Mr.  Abram  Wakeman,  surveyor  from  October,  1864,  to  December,  1867,  has  already 
received  from  the  same  source  $101,206.14.  He,  too,  has  a  very  large  interest  in  the 
undetermined  seizure  cases. 

What  good  reason  is  there  why  the  salaries  and  emoluments  of  the 
collector,  surveyor,  and  naval  officer  of  the  port  of  New  York  should  he 
double  or  more  than  double  that  of  the  President  of  the  United 
States )  five  times  as  much  as  that  of  the  Vice-President,  or  of  the 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CIX 


judges  of  the  Supreme  Court  ?  Yet  sucli  is  the  case  at  the  port  of  New 
York.  These  extravagant  allowances,  which  are  not,  as  we  have  en¬ 
deavored  to  show,  in  the  interest  of  any  sound  public  policy  or  econo¬ 
my,  are  by  no  means  the  worst  effects  of  the  system. 

GOOD  CHARACTER  AND  CONDUCT  OF  THE  MERCHANT  MADE  OF  NO 

VALUE. 

It  teaches  the  public,  and  the  official  class  of  the  public,  to  treat  the 
large,  wealthy,  and  public-spirited  class  of  men  engaged  in  the  importa¬ 
tion  of  merchandise  in  our  great  cities  as  a  class  of  habitual  criminals, 
whose  time  and  energies  are  spent  in  evading  and  defeating  the  laws  of 
the  country  which  it  is  their  duty  to  support  and  defend. 

Human  nature  is  very  apt  to  respond  by  rendering  like  unto  like,  and 
when  it  shall  be  found  that  high  rectitude  of  purpose,  unspotted  and 
steady  integrity  of  life,  shall  no  longer  be  considered  safeguards  to  a 
merchant  against  hasty,  slanderous,  and  injurious  imputations,  then  the 
value  of  high  character  will  decline  in  the  public  mind,  and  public  vir¬ 
tue  become  an  unknown  and  unrecognized  element  in  our  affairs. 

Consider  the  case  of  William  Kedmond  &  Sons,  whose  books  and 
papers  were  seized  without  a  warrant,  and  detained  two  months,  and 
the  manner  of  their  treatment  by  custom-house  officials  and  informers, 
to  be  found  in  volume  1,  page  80,  of  the  testimony : 

By  Mr.  Bayard  : 

Q.  How  long  did  you  say  that  you  had  been  an  importer  in  New  York  ? — A.  Forty 
years. 

Q.  When  was  this  seizure  of  your  books  and  papers  made? — A.  On  the  3d  of  April. 

Q.  Who  appeared  at  your  store  ? — A.  I  have  here  the  letter  which  was  presented  by 
the  deputy  surveyor,  L.  J.  Kirk,  who  was  accompanied  by  a  man  who  did  not  give  his 
name,  but  who,  I  have  understood,  was  called  John  Kanski.  These  two  men  came  and 
delivered  this  letter : 

“  Custom-House,  New  York, 
“Collector’s  Office,  April  1,  1871. 

“  Gentlemen  :  Will  you  please  allow  Mr.  L.  J.  Kirk,  deputy  surveyor  of  this  port, 
to  examine  and  compare  your  books  with  certain  invoices  in  his  possession,  and  also 
offer  him  such  other  information  and  facilities  in  relation  thereto  as  will  enable  him  to 
report  to  me  concerning  an  investigation  now  in  progress  ? 

“  Respectfully, 

“  S.  J.  CLARKE, 

“Deputy  Collector. 

“  Wm.  Redmond  &  Son.” 

Q.  Was  this  the  only  paper  they  exhibited  to  you  ? — A.  Yes,  sir. 

Q.  Was  any  warrant  ever  exhibited  to  you  for  the  seizure  of  your  books  and  pa¬ 
pers?— A.  No. 

Q.  Or  any  order  other  than  this? — A.  This  is  all.  They  first  said  that  if  we  did  not 
deliver  the  books  and  papers,  he  could  get  an  order  from  thb  marshal. 

Q.  Mr.  Kirk  called  with  this  paper.  Did  he  call  on  the  day  it  was  dated — the  1st  of 
April  ? — A.  No ;  it  was  on  the  3d.  Saturday  was  the  1st,  and  the  3d  was  Monday 
morning. 

Q.  Did  lie,  on  that  occasion,  take  your  books  and  papers  into  custody  ? — A.  Yes,  sir. 

Q.  Did  he  take  them  away  from  your  store  ? — A.  He  did. 

Q.  What  books  and  papers  did  he  take  ? — A.  He  took  our  stock-book  commencing 
April  1,  1869.  The  stock-book  means  the  stock  of  linens  received,  and  showing  to 
whom  they  were  sold.  He  took  the  stock-book  commencing  October  1,  1865;  sketch 
of  sales  commencing  October  5,  1870 ;  account-current  book  commencing  June  30, 1863 ; 
letter-book  commencing  April  24,  1829 ;  stock-book  and  letters  of  M.  R.  Young  for 
the  years  1869,  1870,  and  1871.  The  last  of  the  books  we  got  back  in  the  beginning 
of  June. 

Q.  What  books  then  were  left  in  your  custody  ? — A.  We  had  our  day-book  and 
ledger.  He  left  but  these  books.  The  object  seemed  to  be  to  get  our  letter-book  and 
the  letters  from  our  correspondent.  I  do  not  know  what  they  wanted  with  the  sketch 

of  sales. 

Q.  Djd  he  at  that  time  look  over  and  examine  all  your  books  ? — A.  No;  the  man  wrho 


cx 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


accompanied  laim  looked  at  some  of  the  books,  and  I  think  he  read  the  letters,  and 
then  he  said,  “  There  is  enough  here  for  us  to  take  possession.’’ 

Q.  And  he  took  possession  ? — A.  He  took  possession. 

Q.  Did  he  take  away  any  loose  papers  or  correspondence  ? — A.  He  took  the  letters 
from  the  house  to  which  I  refer,  of  the  years  1869,  1870,  and  1871,  up  as  far  as  1871  had 
gone. 

Q.  Did  he  give  you  any  receipt  for  these  papers  when  he  took  them  ? — A.  None  at 
all.  I  took  a  list  of  what  he  had  taken,  in  the  presence  of  a  witness. 

Q.  That  you  took  yourself? — A.  Yes,  sir. 

Q.  But  you  had  no  receipt  from  him  and  no  list  from  him  showing  what  papers  went 
into  his  custody  ? — A.  No  ;  I  took  a  list  of  the  hooks  he  removed,  and  had  a  person  to 
witness  that  he  took  them. 

Q.  That  was  for  your  protection  ? — A.  Yes,  sir. 

Q.  He  did  not  aid  you  in  that  ?— A.  No,  sir  ;  nor  object. 

Q.  What  was  the  name  of  the  party  who  accompanied  him  ? — A.  I  understand  that 
Ms  name  is  John  Kanski. 

Q.  Is  he  connected  with  the  custom-house  ? — A.  I  do  not  know  anything  about  him. 
I  have  heard  that  he  was. 

Q.  Have  you  had  any  reason,  and  if  so,  what  is  it,  to  suppose  that  he  was  the  inform¬ 
ant  in  this  case  ? — A.  I  know  nothing  about  that. 

Q.  Did  I  understand  you  that  at  the  time  you  asked  who  had  made  the  charge  against 
you  under  oath,  and  that  they  refused  to  tell  you  ? — A.  Yes,  sir. 

Q.  Have  you  ever  been  able  to  discover? — A.  I  have  not. 

Q.  How  long  were  your  books  kept  from  you  ? — A.  Until  the  beginning  of  June.  The 
account  which  I  exhibited  came  into  our  possession  either  on  the  5th  or  6th  of  June — 
the  account  which  they  made  out  as  to  the  true  value  of  the  goods,  and  at  that  time 
they  gave  up  the  books. 

Q.  Where  did  you  procure  your  books  ? — A.  From  Mr.  Clarke. 

Q.  Were  your  books  at  any  time,  to  your  knowledge,  taken  to  the  United  States 
court  ? — A.  Not  that  I  know  of. 

Q.  Did  you  ever  see  any  order  or  warrant  from  the  court  for  your  books  ?— A.  No. 

Q.  They  were  taken  without  any  such  order? — A.  Yes,  sir;  Kirk  Hold  me  that  was 
to  save  the  exposure  of  putting  the  marshal  in  there  ;  that  he  could  get  a  warrant  and 
take  them  if  we  refused  to  give  them.  I  had  no  objection  to  giving  them.  I  gave 
them  the  papers.  I  was  not  cheating  the  Government. 

Q.  You  had  no  objection  to  any  orderly  and  legal  process  toward  you  and  your  prop¬ 
erty? — A.  None. 

Q.  What  was  the  amount  of  duty  alleged  by  him  as  your  deficit  at  that  time? — A. 
He  said  nothing  about  it.  He  said  the  papers  were  seized  because  the  goods  were 
invoiced  at  brown  cost  instead  of  bleached  value. 

Q.  Improperly  invoiced — is  that  the  charge  ? — A.  No,  sir.  He  makes  the  difference 
in  duty  $900.  He  makes  one  invoice  of  a  thousand  pounds  $13.83  short;  another  ot 
1,173  pounds  $15.01  short. 

Q.  Did  this  run  through  a  series  of  invoices? — A.  Thirteen. 

Q.  Did  you,  or  not,  when  you  entered  those  goods,  give  bond  for  the  liquidation  of 
the  duties  in  case  there  should  be  error  ? — A.  Certainly. 

Q.  Have  you,  or  not,  in  your  experience  as  a  merchant,  had  duties  repaid  to  you 
where  you  had  overpaid  the  amount? — A.  Yes,  sir. 

Q.  And  have  you  sometimes  been  called  upon  to  pay  an  admitted  deficit  where  there 
was  a  mistake  in  the  estimation  of  the  duties  ? — A.  Certainly. 

Q.  Were  or  were  not  these  errors  of  a  similar  character  to  those  which  would  have 
beeu  remedied  ordinarily  on  showing  your  liquidation  account  at  the  custom-house? — 
A.  I  cannot  imagine  how  it  could  have  occurred.  My  lawyer  told  me  that  he  looked 
upon  it  as  frivolous.  They  instituted  no  proceedings. 

Q.  Was  anything  intimated  to  you  at  any  time,  before  or  after  this  seizure,  in  regard 
to  your  settling  and  compromising,  by  anybody  ? — A.  Nothing  at  all. 

Q.  To  whom  did  you  apply  for  a  return  of  your  books  and  papers? — A.  I  applied  to 
Mr.  Clarke,  deputy  collector. 

Q.  And  he  gave  them  back  to  you  in  June  ? — A.  ’'In  June. 

Q.  Has  any  claim  beeu  made  upon  you  since  ? — A.  Nothing  but  that  account. 

Q.  And  the  matter  stands  there  ? — A.  Just  as  it  was. 

Q.  Do  you  consider  that  your  duties  have  been  fully  paid  according  to  the  true  in¬ 
voice  of  your  goods  ? — A.  I  certainly  do. 

Q.  Have  you  any  knowledge  of  other  cases,  similar  to  this,  among  the  merchants  in 
business  here  ? — A.  I  know  of  none,  of  my  own  knowledge,  but  I  believe  there  are  a 
great  many  persons  who  have  been  treated  in  a  similar  way. 

Q.  Do  you  know  from  reliable  information,  and  can  you  give  us  the  names  of  other 
merchants  whose  counting-rooms  have  been  entered  in  the  manner  you  have  described, 
and  their  papers  taken  ? — A.  I  know  only  of  one  person,  who  has  told  me  himself. 
That  is  Mr.  Whiteside,  of  Whiteside  Brothers.  He  told  me  that  his  papers  had  been 
taken  in  the  same  way  exactly.  0 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXI 


Q.  What  is  the  business  of  that  firm  ? — A.  They  are  also  linen  importers. 

By  Mr.  Casserly: 

Q.  Was  there  any  foundation  whatever  for  this  accusation  that  was  brought  against 
you  and  your  house? — A.  None. 

Q.  Was  there  anything  in  the  whole  business  which  you  could  not  have  explained 
had  an  opportunity  been  given  to  you  before  the  seizure  of  your  papers  ? — A.  I  think 
there  was  not. 

Q.  There  was  no  such  opportunity  given  to  you,  as  I  understand  ? — A.  No. 

Q.  You  have  been  doing  business  here  for  forty  years  ? — A.  Yes. 

Q.  And  although  I  ask  you  to  say  so  yourself,  I  presume  you  will  have  no  difficulty 
in  saying  that  you  have  always  maintained  an  unblemished  reputation  and  standing 
as  a  merchant  ? — A.  I  believe  so.  I  never  had  any  difficulty  with  the  custom-house  in 
entering  goods  in  forty  years. 

Q.  You  never  in  forty  years  had  a  difficulty  with  the  custom-house  in  entering 
goods  ? — A.  Never  once. 

Q.  It  has  been  suggested  that  you  had  no  objection  to  this  seizure  of  your  papers. 
I  understand  that  the  demand  for  your  papers  was  accompanied  by  a  threat  of  expo¬ 
sure  by  getting  a  warrant  to  be  served  by  the  marshal,  in  case  you  did  not  give  the 
papers  without  a  warrant  ? — A.  They  said  they  could  get  a  warrant  from  the  marshal 
if  I  did  not  give  the  papers. 

Q.  You  said  that  you  made  no  objection  to  the  papers  being  taken  after  that  state¬ 
ment  was  made  to  you? — A.  Yes,  sir. 

Q.  If  an  objection  would  have  done  you  any  good,  would  you  not  have  made  it?— 
A.  I  presume  I  should,  of  course. 

Q.  Did  you  consider  the  seizure  of  your  books  and  papers  a  very  friendly  proceed¬ 
ing? — A.  On  the  contrary. 

Q.  On  the  contrary,  you  considered  it  a  very  arbitrary  and  harsh  one? — A.  I  con¬ 
sidered  it,  as  I  said,  a  very  great  indignity,  and  I  do  so  still. 

Q.  When  you  wished  to  look  at  those  books  and  papers  while  they  were  in  custody, 
where  did  you  have  to  go  to  look  at  them  ? — A.  To  the  office  of  Mr.  Clarke,  the  deputy 
collector. 

Q.  Is  he  the  gentleman  who  refused  to  let  you  know  the  name  of  your  accuser? — 
A.  No ;  it  was  either  Kirk,  or  the  other  man  who  came  there,  I  do  not  know  which  of 
them,  but  I  think  I  addressed  myself  to  Kirk. 

Q.  Did  you  make  any  application  to  Mr.  Clarke  for  the  name  of  the  informer? — 
A.  No. 

Q.  You  got  your  books  finally  after  they  had  been  kept  from  you  how  many  months  ? — 
A.  Two  months.  I  got  them  in  the  beginning  of  June,  and  they  were  taken  on  the  3d 
of  April. 

At  the  end  of  two  months  the  books  and  papers  were  returned.  So 
frivolous  was  the  case  that  no  proceedings  were  ever  taken  against  the 
house.  The  matter  was  not  even  laid  before  the  district  attorney. 
(Volume  1,  page  82  and  pages  221,  222.) 

It  was  impossible  to  listen  to  a  recital  of  such  wrongs  upon  a  man  so 
venerable  in  years  and  universally  respected  as  this  old  merchant  with¬ 
out  indignation  toward  those  who  had  been  privy  to  the  outrage  upon 
him,  and  a  desire  for  a  repeal  of  the  law  which  renders  such  acts 
possible. 

The  case  of  Whiteside  Brothers,  as  stated  by  Mr.  William  Whiteside, 
volume  3,  page  72,  &c.,  is,  perhaps,  even  a  stronger  illustration  of  the 
outrages  made  possible  by  the  law  iu  question. 

William  Whiteside  sworn  and  examined. 

By  Mr.  Casserly  : 

Question.  What  is  your  firm  in  this  city  ? — Answer.  Whiteside  Brothers. 

Q.  How  long  have  you  been  in  business  here  ? — A.  Since  the  1st  of  January,  1858. 

Q.  About  fourteen  years  ? — A.  Yes,  sir. 

Q.  What  is  your  line  of  business  ? — A.  Importers  of  white  goods — linens.  We  were 
also  manufacturers  of  linen  here. 

Q.  Manufacturers  in  this  country  ? — A.  Yes,  sir. 

Q.  Is  your  business  pretty  extensive  here  ? — A.  No,  sir;  moderately. 

Q.  Your  house  is  in  Church  street,  is  it  not  ? — A.  Yes,  sir. 

Q?  Has  your  house  had  to  stop  from  seizure  of  your  books  and  papers  ? — A.  Yes,  sir. 

Q.  1  understand  from  you  that  you  have  a  written  statement  in  regard  to  the  sub- 


CXII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


t 

ject,  which  you  have  prepared  as  part  of  your  evidence  in  this  case  ? — A.  I  have  such 
a  paper,  sir. 

Q.  Will  you  read  it  yourself,  sir,  or  let  the  secretary  read  it  ? — A.  I  will  read  it  my¬ 
self,  sir,  with  your  permission,  or  let  the  secretary  read  it ;  whichever  you  please. 

Q.  Perhaps  you  had  better  read  it  yourself. 

[The  witness  read  as  follows  :] 

“  Particulars  of  the  seizure  of  Whiteside  Brothers’  books  and  papers. — On 
5th  June,  1871,  at  about  1  to  1.30  o’clock,  Lewis  J.  Kirk,  John  Koniskie,  and  Lewis 
Jones,  who  gave  their  address  as  the  custom-house,  and  David  H.  Crowley,  41  Cham¬ 
bers  street,  marshal’s  office,  in  a  very  rough,  dictatorial,  unpleasant  manner,  exhibited 
especially  by  L.  J.  Kirk,  came  and  demanded  our  books  and  papers.  I  refused  to  give 
them,  and  told  them  I  would  punish  the  outrage  if  the  law  would  do  so.  They  exhib¬ 
ited  a  warrant  from  a  judge  to  seize  all  books  and  papers  relating  to  the  importation 


of  <M^  67-68  <W>543-546  605-61 0<^WV^>  537-542  1-5,  W.‘  W.  15-18,  W  B 

W  B 

384-385,  <M>  62-53,  <NB> 29-30,  N.^y!  334-336,  W  M  1-12,  <Mc>  227-229,  <W^>  1-34, 


imported  respectively  by  the  steamer  City  of  Brussels,  September,  1870  ;  China,  Sep¬ 
tember,  1870  ;  City  of  Boston,  August,  1870 ;  City  of  Washington,  August,  1870 ; 
Scotia,  June,  1870;  City  of  Antwerp,  June,  1870;  Britannia,  December,  1870;  Etna, 
June,  1869  ;  City  of  New  York,  June.,  1869;  Scotia,  June,  1869;  Scotia,  July,  1869. 
Charge  of  undervaluation,  on  the  oath  of  the  above-named  Lewis  Jones. 

“After  sending  for  our  lawyers,  who  said  this  warrant  authorized  them  to  seize,  we 
allowed  them  to  do  so,  under  protest.  They  commenced  and  took  nearly  all  the  books 
and  letters  they  could  find,  from  about  1868  up  to  that  date,  cramming  them  into  their 
pockets,  &c.,  and  refused  to  give  any  receipt  or  account  of  them.  They  also  took  the 
books  of  our  manufacturing  business  at  Moodna,  Orange  County,  New  York,  which  did 
not  relate  to  importing  at  all,  or  in  any  way,  and  when  we  objected  to  their  taking 
things  their  warrant  did  not  call  for,  they  said  there  was  no  use  in  our  doing  so,  as  they 
would  keep  possession  of  our  premises  until  one  of  them  would  go  to  the  judge,  who 
would  grant  them  authority  to  take  all  they  pleased ;  also  said  we  could  go  to  S.  G. 
Clarke,  ninth  division,  custom-house,  to  see  about  the  matter.  At  the  end  of  about  a 
week  we  did  go  and  see  this  Mr.  Clarke,  who,  about  the  15th  of  June,  returned  part  of 
our  books,  exacting  a  written  promise  we  would  hold  them  subject  to  the  order  of  the 
collector  until  this  matter  was  settled.  On  8th  August  he  returned  another  on  same 
terms,  and  the  correspondence  he  holds  yet.  He  furnished  us  with  a  list  of  fifteen  various 
shipments,  amounting  to  £9,537  11s.  Ad.,  on  which  he  claimed  we  paid.  £9,699  Qs.  10d., 
making  a  difference  in  all  of  £161  15s.  6d.,  the  duty  on  which  would  amount  to  about 
$274  05,  and  told  us,  in  a  very  insulting  manner,  that  our  affairs  were  all  wrong.  Af¬ 
terward  said,  if  not  intentionally  they  were  technically  so.  He  afterward  said  we  were 
not  so  bad  as  many  others,  and  thought  ‘  we  would  not  lose  our  lives  yet.’  Those  are 
the  very  words  he  used.  We  were  quite  at  a  loss  to  understand  how  any  claim  could  be 
made  against  us  by  the  United  States,  as  we  were  well  aware  that  instead  of  owing 
them  they  owed  us,  for  we  frequently  paid  small  sums  more  than  we  should  do,  rather 
than  contest  it  with  them.  We  now  spoke  to  two  of  our  neighbors  who  had  been  sim¬ 
ilarly  dealt  with,  and  ascertained  that  they  had  to  pay  in  the  one  case  $500  and  in  the 
other  over  $2,000  to  John  Koniskie,  who  got  it  with  the  knowledge  of  L.  J.  Kirk,  and, 
they  had  no  doubt,  of  S.  G.  Clarke  also.  These  sums  were  paid  in  greenbacks  to  Konis¬ 
kie,  in  addition  to  the  money  they  paid  to  the  district  attorney. 

“  We  now  broke  off  all  communication  with  S.  G.  Clarke  and  went  to  Collector 
Murphy  personally,  who,  after  hearing  our  story,  said  he  would  give  it  his  attention. 
We  returned  to  him,  by  appointment,  on  the  10tli  July,  and  he  told  us  that  he  had 
examined  into  the  matter,  and  that  he  thought  it  a  persecution,  and  had  stopped  any 
annoyance  to  us  in  the  future.  He  also  handed  us  over  to  Mr.  Laflin,  the  naval  officer, 
who,  he  said,  had  as  much  to  say  in  the  matter  as  himself,  and  asked  us  to  give  any 
explanation  to  Mr.  Laflin  which  he  desired  to  have.  We  did  so,  and  Mr.  Laliin  also 
seemed  satisfied.  On  the  11th  or  12th  July  we  were  sued,  by  direction  of  said  Mr. 
Clarke,  for  $100,000,  and  we  understood  that  he  deliberately  told  the  collector  that  we 
were  bringing  in  bleached  linens  here  at  the  price  of  brown  ones — a  thing  he  must  have 
known  to  be  false.  He  also  wished  us  to  go  to  the  district  attorney,  who,  he  said, 
could  settle  this  suit  with  us  for  fifteen  cents  if  he  pleased,  which  we  refused  to  do. 

“  On  or  about  October  8  we  were  told  by  a  friend  that  the  remainder  of  our  books 
would  be  given  us  by  applying  personally  at  the  district  attorney’s  office,  as  they  had 
an  order  there  to  do  so.  We  did  go,  and  they  said  there  was  no  such  order,  and  that 
the  suit  was  not  discontinued,  but  they  would  proceed  and  get  judgment.  We  said 
we  would  not  allow  that,  and  left. 

“  On  or  about  10th  October,  1871,  at  abouft  12  o’clock,  I  met  the  collector  (Mr.  Mur- 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXIII 


phy)  in  William  street,  who  told  me  he  had  showed  our  case  to  the  Secretary  of  the 
Treasury,  who  agreed  with  him  that  it  was  an  oppression,  and,  hy  his  consent  and 
authority,  he  had  written  to  the  district  attorney  to  stop  all  proceedings  against  us. 
He  also  added  that  ‘  these  rascals  were  trying  to  make  a  mountain  out  of  a  mole-hill., 
There  the  matter  still  rests. 

“  We  think  ourselves  very  seriously  injured  hy  this  act,  and  complain :  First.  That 
any  judge,  who  ought  to  be  the  guardian  of  our  liberties,  should  authorize  the  seizure 
of  our  books  and  papers  on  the,  simple  oath  or  belief  of  a  party  of  no  responsibility,  to 
the  great  injury  of  our  business,  peace  of  mind,  and  character.  Second.  That  any 
law  should  exist  to  give  people  of  mercenary  and  unscrupulous  dispositions  power  or 
show  of  authority  to  so  annoy  an  honorable  merchant  in  his  business.  Third.  That 
smuggling  should  be  compromised  at  all,  when  proved,  as  it  has  a  tendency  to  drive 
honorable  men  out  of  the  business.  Fourth.  That,  presuming  that  all  that  they  said  in  our 
case  was  true,  (as  not  one  word  of  it  is,)  and  that  we  had  undervalued  £9,537  11s.  Ad. 
to  the  extent  of  £151  15s.  6d.,  (less  than  If  per  cent.,)  they  should  attempt  to  intimi¬ 
date  us  with  a  suit  for  $100,000 ;  many  would  rather  compromise  than  run  such  a  risk. 
Fifth.  That  S.  G.  Clarke  should  misstate  and  misrepresent  our  affair  to  the  collector, 
and  even  to  ourselves,  and  that  John  Koniskie  should  tell  us  he  was  glad  to  find  we 
were  so  well  off,  as  we  could  better  bear  the  loss  tkap  any  of  our  neighbors  they  had 
seized  yet,  showing  the  object  of  taking  our  books  at  all  was  to  find  out  what  we 
could  bear.  Sixth.  That  of  all  the  charges  they  trumped  up  against  us,  only  one  was 
of  those  mentioned  in  the  warrant  of  seizure.” 

Now,  it  appears  from  the  testimony  in  volume  3,  pages  82  and  83,  that  if 
all  the  charges  made  by  Mr.  Deputy  Collector  Clarke  against  the  firm  had 
been  strictly  true,  the  outside  loss  to  the  Government  would  have  been 
two  hundred  and  seventy-four  dollars ;  and  for  an  alleged  default  of  that 
amount  of  duty,  running  through  a  series  of  invoices,  all  the  books  and 
papers  of  the  firm  and  its  individual  members  were  seized  and  carried 
away,  and  a  portion  of  the  private  correspondence  is  withheld  up  to  this 
time.  The  seizure  took  place  on  the  5th  of  June,  1871,  and  in  Febru¬ 
ary,  1872,  the  correspondence  of  the  firm  and  private  letters  of  the  part¬ 
ners  were  still  retained  by  the  Government  officials.  No  inventory  was 
taken  or  allowed  to  be  taken  of  the  books  and  papers  so  seized,  the  time 
of  seizure  occupying  about  fifteen  minutes.  To  whose  eye  this  private 
and  commercial  correspondence  has,  in  the  mean  time,  been  subjected,  is 
unknown.  The  firm  were  successful  in  defeating  the  assault  upon ‘them. 
The  charge  has  been  abandoned,  but  Mr.  Whiteside  estimates  the  pecu¬ 
niary  damage  of  the  transaction  at  one  hundred  thousand  dollars.  Of 
the  wounds  inflicted  upon  their  feelings,  comfort,  and  the  reputation  of 
their  house,  what  estimate  shall  be  made? 

The  case  of  Heinemann  &  Co.,  volume  1,  page  235,  is  similar  in  its  gen¬ 
eral  features,  but  we  have  already  given  instances  enough  to  show  any 
reasonable  or  candid  man  that  no  greater  outrages,  under  color  of  law, 
were,  ever  perpetrated  upon  a  mercantile  community.  But  for  the 
undoubted  proof  disclosed  by  the  testimony,  such  things  would  be 
incredible  in  the  United  States  of  America. 

Judge  Hopkinson,  in  the  case  of  the  United  States  vs.  Twenty-eight 
Packages,  uses  the  following  language  : 

It  is  believed  that  no  court  of  competent  jurisdiction  has  held,  in  this  country,  that 
“  it  was  within  the  power  of  the  Government,  on  the  trial  of  an  issue  of  forfeiture  under 
the  revenue  law,  to  compel  a  party  to  bring  into  court,  as  evidence,  books  and  papers 
to  procure  his  own  condemnation.” 

Nay,  more,  it  is  a  familiar  doctrine,  that  “  when  books  and  papers  are  actually  pro¬ 
duced  on  the  trial,  the  prosecuting  officer  for  the  United  States  is  not  permitted  by  the 
court  to  ransack  and  search  them  at  will,  but  is  required  to  call  for  a  particular  paper, 
or  letter,  or  account,  so  sensitive  is  the  law  in  respect  to  the  secrets  of  business  and 
trade.”  Well  and  properly  has  it  been  asked,  wliat,  if  any,  is  the  legal  distinction  in 
this  respect  “between  compelling  an  accused  party,  or  owner  of  inculpated  merchan¬ 
dise,  to  express  verbally  his  own  condemnation,  or  betray  himself  by  being  compelled 
to  produce  a  paper  or  a  book  in  which  he  has  written  that  which,  if  made  public,  would 
produce  the  same  result  ?  Has  Congress  any  more  constitutional  power,  by  ransacking 
private  drawers  and  forcing  a  banker’s  sale,  to  secure  admissions  from  a  citizen  which 


CXIY 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


condemn  his  property,  thau  it  has  to  obtain  evidence  by  extorting  confessions  from  an 
individual  by  the  rack  and  thumb-screw  V” 

,  MR.  SPECIAL  AGENT  JAYNE’S  HAND-CUFFS. 

If  the  “rack  and  thumb  screw7’  were  mere  figures  of  speech  used  by 
Judge  Hopkinson,  we  might  infer  from  the  language  of  Mr.  Special 
Agent  Jayne,  to  be  found  volume  2,  page  523,  that  they  were  revolting 
realities.  He  says : 

By  Mr.  Bayard  : 

Q.  Now,  these  were  your  methods  mostly  ;  let  us  know  those  unfrequently  used  by 
you. — A.  By  any  legitimate  means  of  ascertaining  the  truth. 

Q.  Do  you  consider  the  use  of  handcuffs  a  legitimate  means  of  obtaining  the  truth? — 
A.  Hardly ;  I  would  not.  , 

Q.  Have  you  ever  used  such  appliances  ? — A.  Put  handcuffs  on  a  man  ? 

Q.  Yes,  sir. — A.  No,  sir;  I  never  have. 

Q.  Did  you  ever  threaten  to  put  handcuffs  on  a  man  ? — A.  I  think  not. 

Q.  Just  think  again. — A.  I  thought  that  over  very  thoroughly.  I  think  not. 

Q.  Are  you  prepared  to  answer  you  never  did? — A.  I  am  prepared  to  answer  that  I 
think  that  when  men  have  been  in  my  office  that  have  been  guilty  of  fraud,  and  it  was 
a  moral  certainty,  that  other  men  have  walked  in  my  office  and  have  laid  a  pair  of 
handcuffs  down  on  the  table,  without  any  suggestion  for  their  use  or  anything  of  the 
kind ;  quite  likely.  There  happened  to  be  a  pair  in  my  office  for  a  short  time. 

Q.  How  long  did  you  keep  handcuffs  in  your  office  ? — A.  Well,  sir,  I  never  procured 
handcuffs  to  be  brought  thei£ ;  there  was  a  pair  left  there  accidentally  by  a  United 
States  marshal,  and  they  were  there  some  little  time. 

Q.  What  were  they  brought  there  for  by  him  ? — A.  He  had  a  prisoner  in  charge. 

Q.  Did  he  bring  the  prisoner  there? — A.  Yes,  sir;  I  think  so.  He  left  them  there. 

Q.  What  was  a  prisoner  doing  in  your  office  handcuffed  ? — A.  I  think  he  once  brought 
a  prisoner  from  Massachusetts  handcuffed.  Some  man  I  had  nothing  to  do  with  at  all; 
I’ve  forgot  the  man’s  name. 

Q.  How  long  did  you  keep  those  handcuffs  in  your  office  ? — A.  I  think  they  hung 
there  ever  since.  I  don’t  know  whether  they  are  there  now  or  not. 

Q.  Quite  within  view  ? — A.  No,  sir;  I  think  not.  I  don’t  know  that  I  have  seen 
them  for  many  months. 

Q.  Then  the  use  of  handcuffs,  or  the  threat  of  handcuffs,  is  that  considered  by  you  a 
legitimate  method  of  obtaining  information  upon  which  to  base  the  seizure  of  mer¬ 
chants’  books  and  papers  ? — A.  It  might  be  legitimate,  to  make  men  tell  the  truth,  to 
lay  them  down  to  remind  them  that  they  might  be  used. 

The  Witness.  Those  things  generally  occurred  when  the  handcuffs  have  been 
brought  in  the  room,  I  think,  in  regard  to  men  who  had  been  smuggling — some  fellow 
smuggling  on  the  dock — men  brought  there  by  other  officers. 

Q.  Are  you  willing  to  state  to  the  committee  further  the  extent  to  which  you  have 
acted  upon  the  fears  of  men  in  compelling  them  to  give  you  information  to  use  in  order 
to  prosecute  your  suits? — A.  Those  have  been  done,  sir,  to  a  very  limited  extent.  A 
man  who  has  been  guilty  of  doing  wrong  generally  fears. 

Q.  Now  tell  us  the  man  who  you  were  interrogating  and  seeking  to  terrify  at  the 
time  you  had  this  unexpected  aid  from  the  authority  of  the  marshal  with  the  pair  of 
handcuffs. — A.  I  think  there  was  no  one  at  that  time  iu  my  office.  I  don’t  think  they 
were  left  there  for  that  purpose  at  all. 

Q.  Did  you  not  state  that  you  had  a  man  under  examination,  and  that  some  one 
came  in  and  put  down  a  pair  of  handcuffs  beside  him  without  saying  anything,  or 
without  your  ordering  it  ? — A.  I  didn’t  say  that.  I  said  such  a  case  might  have  oc¬ 
curred. 

Q.  What  made  you  say  that  ?  Did  such  a  case  occur  ? — A.  I  presume  such  a  case 
might. 

Q.  What  cases  have  you  had  of  that  kind  ? — A.  I  presume  not  more  than  two  or 
three. 

Q.  Who  was  the  person  who,  at  your  suggestion,  comes  in  upon  the  scene  with  a 
pair  of  handcuffs? — A.  It  was  clone  at  my  suggestion  at  that  time,  I  think — the  first 
time. 

Q.  Who  was  it  came  the  second  time  ? — A.  Well,  sir,  I  couldn’t  tell  you  now. 

Q.  "Who  was  the  person  ? — A.  Well,  sir,  the  only  time  such  a  thing  occurred  was 
during  the  time  of  the  seizure  of  bay-oil. 

Q.  Do  you  remember  the  names  of  those  individuals  ? — A*  I  do  not,  sir. ' 

Q.  You  can’t  recollejct  the  name  of  the  man  ? — A.  I  would  remember  by  going  and 
looking  over  the  testimony.  I  could  pick  out  the  name. 

Q.  How  long  since  this  thing  occurred  ? — A.  It.is  a  year  or  two. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXV 


Q.  Is  that  as  near  as  you  can  come  to  it  ? — A.  I  think  it  was  a  year  ago  last  winter. 

Q.  Was  that  the  first  case  ? — A.  I  think  it  was,  sir. 

Q.  When  did  the  next  case  occur  ? — A.  I  think  they  all  appeared  about  that  time — 
all  that  did  occur. 

Q.  I  want  to  know  who  the  man  was  who  came  in  so  opportunely  and  laid  dowrt 
handcuffs  while  you  were  examining  the  witness. — A.  I  think  the  first  time  it  ever 
occurred  it  was  J.  S.  Chalker. 

Q.  Who  is  Mr.  Chalker  ? — A.  He  is  now  special  agent  with  Mr.  Howe. 

Q.  What  was  his  occupation  at  that  time  ? — A.  I  think  he  was  inspector  of  customs 
at  that  time. 

Q.  Where? — A.  New  York. 

Q.  What  idea  had  he;  that  you  were  interrogating  this  timid  witness? — A.  I  think 
he  brought  him  to  me. 

Q.  Was  he  there  during  all  the  time  ? — A.  I  think  he  was  outside  most  of  the  time. 

Q.  At  what  stage  of  the  terrification  did  he  come  in  with  the  handcuffs  ? — A.  I 
couldn’t  say.  I  think  he  came  in  during  the  time  that  I  was  examining  the  witness. 
I  don’t  know*  at  what  stage ;  I  couldn’t  say. 

Q.  How  often  did  you  actually  put  those  handcuffs  on  anybody,  or  any  number  of 
men  ? — A.  I  never  put  them  on  any  man  in  my  life. 

Q.  Who  put  them  on  in  your  presence?— A.  I  don’t  think  any  man  ever  put  them  on 
in  my  presence. 

Q.  That  you  swear  to  ? — A.  I  swear  that  I  have  no  knowledge  of  their  ever  having 
been  put  on  a  man  to  terrify  him. 

Q.  Did  you  put  them  on  to  encourage  him.  if  not  to  terrify  him? — A.  I  think  not  for 
any  such  purpose.  I  think  I  have  unlocked  the  handcuffs  and  put  it  on  my  wrist 
to  see  how  it  worked,  but  not  to  terrify  him. 

Q.  If  you  didn’t  put  them  on  to  terrify  him  or  eucourage  him,  what  did  you  put  them 
on  him  for  ? — A.  I  couldn’t  put  them  on. 

Q.  What  did  you  put  them  on  your  own  wrist  for? — A.  To  see  how  the  handcuff 
worked.  To  see  how  it  opened  and  how  it  locked. 

Q.  Had  you  these  witnesses  under  examination  while  you  were  playing  with  the 
handcuffs  in  this  way  ? — A.  No,  sir;  not  while  I  was  putting  it  on  my  own  wrist. 

.  Q.  You  say  you  didn’t  put  a  handcuff  on  anybody  ? — A.  I  think  not. 

Mr.  Jayne,  it  would  seem,  has  a  fine  eye  for  dramatic  effect  in  his  pro¬ 
fession,  and  he  does  not  fail  to  cultivate  the  accessories  in  his  own  per¬ 
sonal  appearance  and  demeanor.  Terrorism  being  one  of  his  favorite 
and,  as  he  considers,  legitimate  arguments,  his  look  and  manner  are 
brought  into  harmony.  In  his  skill  as  a  searcher  after  moieties  he 
seems  to  outstrip  his  competitors,  and  Colonel  Frank  E.  Howe,  and  his 
aids,  Brush,  Chalker,  et  al.,  must  needs  pale  their  ineffectual  fires  be¬ 
fore  the  superior  genius  of  Jayne.  That  such  a  man  should  have  been 
permitted  to  continue  in  office  after  the  development  of  his  character 
and  conduct,  may  well  be  a  cause  of  astonishment. 

BRIBES  TO  MERCHANTS7  CLERKS  TO  INFORM  AGAINST  THEIR  EM¬ 
PLOYERS. 

Perhaps  one  of  the  worst  results  of  employing  such  characters  is 
giving  them  the  large  and  dangerous  powers  embraced  within  the 
present  law;  and  the  effect  upon  the  community  of  the  methods  re¬ 
sorted  to  by  such  men  as  Jayne  to  procure  testimony  upon  which  to 
obtain  warrants  to  make  these  seizures  of  books  and  papers  is  very 
shocking.  At  page  528  Jayne  admits  that  he  has  paid  money  to  mer¬ 
chants  for  information  against  other  merchants,  and  that  he  lias  bribed 
the  clerks  and  other  confidential  employes  of  merchants  to  disclose  the 
most  private  affairs  of  their  employers.  Can  such  abominations  as 
these  be  justified  by  the  pretense  that  they  are  meant  to  prevent  or 
punish  frauds  upon  the  revenue'?  Who  will  not  say  that  the  remedy  is 
not  ten  times  worse  than  the  disease?  What  security  is  there  that  the 
book-keeper  or  clerk  so  suborned  by  the  informer  shall  not  make  such 
entries  in  the  books  of  the  merchant,  unknown  to  him,  as  would  be 
proof  almost  conclusive  of  criminality  ?  Such  a  system  would  honey¬ 
comb  society  with  fraud  and  dissimulation  and  banish  ail  confidence 
between  men. 


CXVI 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Jayne,  it  seems,  discovered  a  class  of  frauds  in  the  weighing  depart¬ 
ment  of  the  custom-house,  and  one  of  the  guilty  parties,  E.  M.  Carr, 
escaped  to  Canada  to  avoid  punishment.  His  return,  however,  was 
negotiated  by  Mr.  Jayne,  and  through  Carr’s  knowledge  of  the  transac¬ 
tion  and  complicity  therein  charges  were  brought  against  a  number  of 
merchants,  who  were  forced  to  make  settlements  with  Jayne  under  the 
moiety  system,  by  which  he  gained  large  sums  of  money.  Carr  remains 
in  New  York  in  safety,  and  instead  of  being  sent  to  prison,  as  he  should 
have  been,  we  find,  on  page  518,  that  he  was  rewarded  to  the  amount 
of  $5, GOO  by  Jayne. 

The  moral  of  all  this,  it  would  seem,  is  that  fraud  upon  the  part 
of  a  Government  official  may  be  conducted  without  any  risk,  for  if  the 
fraud  should  not  be  discovered,  he  will  retain  his  profits,  and  should  it 
be  discovered,  he  can,  by  implicating  other  and  wealthier  men,  not  only 
free  himself  from  punishment,  but  be  handsomely  compensated  into  the 
bargain. 

Y. 

THE  CUSTOM-HOUSE  AS  A  PARTY  ENGINE. 

By  the  last  clause  of  the  resolution  the  committee  are  instructed  to 
inquire — 

Also,  whether  the  patronage,  officers,  or  employes  of  said  custom-house,  were  used  to 
influence  or  control  either  or  both  of  the  two  last  State  convention  of  the  republican 
party  iu  New  York,  and  whether  assessments  of  money  have  been  made,  or  contribu¬ 
tion  of  money  exacted,  to  be  used  to  control  primaries,  secure  delegates  to  State  con¬ 
ventions,  or  for  other  political  purposes,  and  whether  any  of  the  said  officers  in  said 
custom-house  have  been  or  are  used  as  instruments  of  political  or  party  patronage. 

The  custom-house  at  New  York,  with  its  little  army  of  officers  and 
employes,  some  fifteen  hundred  in  number,  has  undoubtedly  been  used 
with  effect  as  a  political  engine.  Public  offices  have  been  made  a  reward 
for  partisan  service,  and  such  practices  are  neither  new  nor  of  late  date. 

The  period  of  time  covered  by  the  resolution  referred  to  the  com¬ 
mittee  embraces  the  years  1870  and  1871,  and  the  testimony  taken 
relates  chiefly  to  that  period. 

According  to  the  testimony  of  Mr.  Horace  Greeley,  Charles  H.  Grant, 
George  W.  Palmer,  and  many  other  witnesses,  we  are  unable  to  doubt 
that  u  the  patronage,  officers,  and  employes  of  the  custom-house”  were 
used  to  influence,  and  did  in  fact  influence  and  control,  both  of  the  two 
last  State  conventions  of  the  republican  party  in  New  York,  and  its 
general  organization  in  1870  and  1871. 

Of  the  utter  demoralization  and  wide-spread  injury  to  the  public  ser¬ 
vice  caused  by  this  perversion  of  official  power  and  abuse  of  the  pat¬ 
ronage  inherent  in  the  bestowing  of  public  office,  we  have  abundant 
and  conclusive  testimony. 

Indeed,  the  frauds,  the  misdemeanors,  defalcations,  and  abuses  to 
which  we  have  referred  in  the  foregoing  pages,  have  their  well-spring 
in  the  necessary  corruptions  that  flow  from  the  prostitution  of  appoint¬ 
ments  in  the  civil  service  to  mere  party  ends. 

It  would  be  a  Utopian  idea  that  so  vast  a  machine  as  the  New  York 
custom-house  could  be  operated  without  the  incidental  results  of  human 
frailty  and  sin. 

But  when  the  governing  ideas  of  such  an  institution  are  based  upon 
the  very  lowest  views  of  political  morality  and  partisan  expediency,  the 
result  must  necessarily  be  such  as  is  disclosed  by  the  present  testimony. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXVII 


THOMAS  MURPHY  AS  COLLECTOR  OF  THE  PORT  OF  NEW  YORK. 

When  the  President  of  the  United  States  selected  Mr.  Thomg.s 
Murphy  as  the  collector  of  the  port  of  New  York,  and  confided  to  his 
hands  the  grave  trusts  and  high  powers  of  that  most  responsible  posi¬ 
tion,  he  should  have  known  that  unless  Mr.  Murphy  was  capable  of 
being  elevated  to  a  proper  sense  of  those  trusts  and  powers,  noth¬ 
ing  but  confusion  and  discredit  could  result  from  his  appointment, 
for,  as  Burke  finely  says,  it  is  a  certain  truth  that  u  great  empire  and 
little  minds  go  ill  together.” 

Mr.  Murphy  himself  was  before  the  committee,  and  testified  at 
great  length  to  his  administration  of  Hie  office.  He  had  every  advan¬ 
tage  in  knowing  the  character  of  the  testimony  taken  by  the  committee, 
because  he  was  a  regular  attendant  upon  its  sessions.  He  had  the 
advantage  of  having  such  questions  asked  as  he  desired,  and  the  addi¬ 
tional  benefit  of  the  presence  and  the  intelligent  and  constant  counsel  of 
his  personal  friend  and  political  associate,  Mr.  George  Bliss,  jr.,  whose 
testimony  also  will  be  found  in  volume  3,  at  page  433,  &c. 

Having  heard,  therefore,  all  that  was  alleged  by  witnesses  in  regard 
to  his  maladministration  in  office  and  gross  abuse  of  his  official  and 
party  patronage,  Mr.  Murphy  had,  after  weeks  of  deliberation,  the 
largest  opportunity  of  denial  or  correction  and  of  summoning  witnesses 
for  that  purpose. 

After  fair  and  full  consideration  of  the  testimony,  we  are  forced  to 
conclude  that  Mr.  Murphy  never  could  have  had  the  faintest  com¬ 
prehension  of  the  real  duties  and  high  responsibilities  of  his  position 
as  collector  of  customs  at  the  port  of  New  York. 

So  far  as  the  great  interests  of  commerce  were  concerned — their  regu¬ 
lation  and  advancement — Mr.  Murphy  seems  to  have  had  little  or  no 
idea.  His  examination,  commencing  at  page  347  of  volume  3,  discloses 
a  personal  ignorance  of  the  duties  and  details  of  management  of  the 
affairs  of  the  custom-house  almost  incredible  in  a  man  who  had  held 
the  office  for  nearly  two  years  and  left  it  with  such  effusive  and  unusual 
expressions  of  regret,  confidence,  and  esteem  on  the  part  of  the  Presi¬ 
dent. 

In  short,  Mr.  Murphy  had  little  or  no  qualification  by  nature,  educa¬ 
tion,  or  habits  of  thought  for  such  a  position.  His  only  idea  of  the 
New  York  custom-house  seems  to  have  been  that  it  was  a  political  ma¬ 
chine,  to  be  run  closely  and  constantly  in  the  interests  of  the  political 
party  with  which  he  happened  to  be  acting  at  the  time.  His  views  on 
this  subject  will  be  found  in  a  statement  of  a  conversation  he  had  on 
xYugust  19, 1870,  and  the  day  following,  with  General  George  W.  Palmer, 
at  that  time  appraiser  at  the  port  of  New  York. 

The  statement  of  the  conversation  was  made  at  the  time  by  General 
Palmer,  and  taken  down  in  short  hand  by  his  secretary,  and  after¬ 
wards  written  out.  The  substance  of  it  was  given  by  General  Palmer, 
on  his  examination  in  New  York,  volume  1,  pages  268,  269.  On  his 
subsequent  examination,  in  Washington,  he  produced,  under  a  subpoena 
daces  tecum ,  the  statement  as  written  out.  See  volume  3,  pages  579, 
580  to  582. 

It  will  be  found  to  present  a  very  striking  inside  view  of  the  opera¬ 
tions  of  the  custom-house  as  directed  by  Mr.  Murphy  under  inspiration, 
as  he  says,  from  Washington,  in  the  details  of  New  York  politics,  from 
a  State  convention  and  a  candidate  for  governor  down  to  a  laborer  in 
the  appraiser’s  store. 


CXVIII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION, 


Statement  of  conversation  between  George  W.  Palmer,  appraiser,  and  Thoma?  Murphy,  collector. 

Appraiser’s  Office, 

New  York,  August  19, 1870. 

On  Thursday  afternoon,  August  18,  1870,  General  P.  H.  Jones,  postmaster  of  this 
city,  called  on  me,  and,  among  other  things,  stated  that  Thomas  Murphy,  collector, 
said  to  him  (Jones)  that  he  (Murphy)  had  been  informed  that  a  man  employed  in  my 
department  had  made  a  speech  in  a  political  meeting  the  night  before  Which  displeased 
Mr.  John  V.  Gridley  ;  whereupon  Gridley  threatened  that  he  would  have  him  turned 
out  of  my  office  if  he  did  not  work  with  him ;  that  the  collector  was  anxious  that 
this  man  should  not  be,  turned  out,  and  wanted  me  to  call  and  see  him  at  3  o’clock 
on  that  day. 

The  business  of  the  office  prevented  me  from  calling,  but  I  sent  a  note  to  Mr. 
Murphy  saying  that  I  had  expected  to  call  at  3  o’clock,  but  could  not,  and  would  call 
the  next  day  at  any  time  he  should  designate.  He  sent  back  word  that  he  would  be 
glad  to  see  me  at  any  time  after  11  o’clock  in  the  morning,  as  he  did  not  arrive  at  the 
custom-house  before  that  hour. 

I  called  soon  after  11  o’clock  on  Friday,  (to-day,)  met  Mr.  Murphy,  and  he  con¬ 
ducted  me  into  the  assistant  collector’s  office,  where  a  long  discussion  took  place  in 
regard  to  the  ordering  of  goods  to  the  public  store.  Mr.  Murphy  was  called  away  by 
Judge  Pierrepont,  but  requested  me  to  stop  at  his  office  and  see  him  before  leaving  the 
custom-house,  which  I  did.  I  found  him  closeted  in  his  private  office  with  General 
Hazen  and  Mr.  Terwilliger.  These  gentlemen  immediately  departed,  and  I  was  left 
alone  with  the  collector.  He  commenced  the  conversation  by  saying  that  at  a  meeting 
in  a  certain  district  in  this  city  a  man  employed  in  my  office  made  a  speech  in  favor  of 
having  the  roll  of  members  of  the  organization  printed,  which  displeased  Mr.  John  V. 
Gridley,  who  had  threatened  to  have  the  man  turned  out  of  my  office  if  he  did  not 
work  with  him,  (Gridley;)  that  he  (the  collector)  had  men  to  go  and  “draw  Gridley 
out,”  and  that  Gridley  stated  in  the  Lincoln  Club  that  General  Grant  was  a  scoundrel. 

The  collector  then  said  that  “  Gridley  must  be  crushed  out,”  as  he  was  an  enemy  of 
General  Grant,  and  this  young  man  ought  not  to  be  turned  out  of  my  office;  that  he 
had  told  General  Grant  about  it,  and  he  was  anxious  to  have  him  retained.  I  told  him 
that  if  the  facts  were  as  he  had  been  informed,  and  if  he  would  give  me  the  name  of 
the  young  man,  I  would  call  him  to  me  and  say  that  he  need  not  fear  losing  his  place 
on  account  of  the  action  he  had  taken.  He  thereupon  handed  me  a  paper  with  the 
name  of  “James  Corrigan”  written  thereon,  saying  that  he  was  the  person  referred  to. 
I  then  told  him  that  James  Corrigan  had  been  with  me  that  morning,  to  say  that 
Mr.  Murphy’s  friends  were  opposed  to  him,  and  that  he  preferred  to  be  removed  from 
office  “rather  than  go  back  on  his  old  friends;”  that  this  was  his  own  language,  and 
there  must  be  some  mistake  about  the  story ;  but  I  would  pledge  myself  that  as  long 
as  Mr.  Corrigan  was  a  good  workman  and  a  good  republican,  I  should  not  disturb  him 
for  any  such  reason  as  that  assigned. 

Mr.  Murphy  then  said  that  General  Grant  was  studying  the  politics  of  the  State  of 
New  York  with  great  care,  and  no  one  could  appreciate  the  interest  which  he  (Gen¬ 
eral  Grant)  took  in  our  State  and  city  politics.  He  (Mr.  Murphy)  had  told  General 
Grant  that  the  Federal  office-holders  here  ought  to  work  together  and  compel  all  their 
subordinates  to  one  line  of  policy,  and  that  was,  in  supporting  him  (the  President)  as 
the  head  of  the  republican  party;  that  he,  (Mr.  Murphy,)  General  Jones,  General 
Sharpe,  General  Pleasonton,  Mr.  Cornell,  and  myself  should  get  together  and  arrange 
who  should  go  to  the  State  convention  from  the  different  districts.  He  had  told  “the 
boys”  in  the  different  districts,  for  the  purpose  of  harmony,  that  there  should  be  sent 
men  of  wealth,  as  a  matter  of  compliment,  who  would  be  willing  to  pay  “one  or  five 
hundred  dollars”  toward  the  success  of  the  party  for  the  honor  conferred,  and  that  we, 
the  heads  of  departments,  should  decide  who  should  be  the  candidates  for  State  del¬ 
egates  in  the  primaries  in  each  district,  and  insist  upon  all  the  employes  in  all  the 
different  offices  supporting  those  candidates. 

I  said,  in  reply,  that  I  thought  it  would  be  a  delicate  matter  for  office-holders  to  un¬ 
dertake  to  dictate  to  the  associations  in  the  different  districts  who  should  go  from  them 
to  the  State  convention,  and  still  more  delicate  to  attempt  to  control  the  judgments 
of  men  employed  in  the  different  departments  as  to  the  best  men  to  represent  them. 
He  said  that  he  should  not  hesitate  to  do  it;  that  it  was  General  Grant’s  wish,  and 
.  General  Grant  was  the  head  of  the  republican  party,  and  should  be  authority  on  this 
subject.  I  told  him  that  I  wished  and  desired  to  support  General  Grant  and  his  admin¬ 
istration,  and  would  do  all  in  my  power  in  that  regard,  but  doubted  the  wisdom  of 
this  course;  that  I  had  been  laboring  since  m37  appointment  to  support  the  adminis¬ 
tration  by  doing  all  I  could  to  assess  the  proper  duties  on  imports,  thereby  increasing 
the  amoun  of  money  which  went  into  the  Treasury  by  millions  of  dollars  ;  that  I  had 
supposed  this  to  be  the  best  mode  of  strengthening  the  hands  of  the  administration. 

Mr.  Murphy  then  said  that  it  was  very  important  to  General  Grant  that  the  caudi- 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


ex  ix 


date  for  governor  in  this  State  should  he  known  as  one  of  his  supporters.  He  (General 
Grant)  had  said  that,  in  case  of  a  disagreement  between  the  two  Senators  of  the  State 
as  to  who  should  he  the  candidate,  the  question  should  he  referred  to  General  Grant 
himself,  add  he  be.  allowed  to  name  the  candidate,  who  should  he  nominated  by  accla¬ 
mation  in  the  convention.  General  Grant  felt  very  great  interest  in  this,  and  some  of 
the  candidates  named,  it  was  understood,  were  opposed  to  him.  'Mr.  Murphy  then 
named  as  the  prominent  man  who  should  not  he  nominated,  and  who  would  he  obnox¬ 
ious  to  General  Grant,  Mr.  Marshall  O.  Roberts.  Of  the  other  candidates  mentioned, 
he  said  none  w#uld  do  except  Stewart  L.  Woodford.  While  talking  upon  tips  subject, 
Mr.  Terwilliger  came  into  the  room,  and  after  listening  a  short  time  said  in  an  uneasy 
manner  that  he  thought  Mr.  Horace  Greeley  would  he  a  good  candidate.  The  collector, 
however,  did  not  concur  in  this  opinion. 

During  the  conversation  I  asked  Mr.  Murphy  if  it  was  true,  as  some  people  claimed, 
that  President  Grant  was  inimical  to  Governor  Fenton.  I  said  I  was  fearful  that  this 
impression  had  obtained  in  the  western  part  of  the  State,  by  reason  of  the  change  of 
postmaster  at  Dunkirk,  lately  made.  He  said  he  knew  all  about  that — that  the  talk 
was  had  in  his  presence.  The  change  was  made  on  the  representations  of  Dr.  Van 
Aernam,  that  while  he  was  a  member  of  Congress  he  induced  Johnson  to  appoint  Mr. 
Patterson,  and  this  being  his  appointment,  he  desired  to  have  Mr.  Patterson  removed 
and  Mr.  Hyde  put  in  his  place.  I  said  that  Dr.  Van  Aernam  was  simply  a  head  of  a 
bureau  in  Washington,  and  I  could  hardly  seethe  propriety  of  his  counseling  in  regard 
to  the  district  politics,  as  against  the  member  of  Congress,  to  which  Mr.  Murphy  re¬ 
plied  that  it  was  very  rough — the  beating  of  Mr.  Sessions  in  the  thirty-second  senato¬ 
rial  district  for  the  State  senate.  I  differed  with  him  in  regard  to  this  matter,  and 
explained  my  ideas  in  regard  to  the  defeat  of  Mr.  Sessions. 

Mr.  Murphy  said,  finally,  that  President  Grant  was  the  representative  and  head  of 
the  republican  party,  and  all  good  republicans  should  support  him  in  all  his  measures 
and  appointments,  and  any  one  who  did  not  do  it  should  be  “  crushed  out;”  and  that 
it  was  our  duty,  as  office-holders,  to  support  him ;  that  General  Grant  felt  great  inter¬ 
est  in  this  State,  and  desired  the  unanimous  support  of  the  republican  party. 

In  a  conversation,  on  the  following  day,  (Saturday,  20th  August,)  in  the  presence  of 
Mr.  Town  ley,  Mr.  Murphy  said  he  had  told  the  President  of  the  transaction  in  regard 
to  Mr.  Corrigan,  the  opener  and  packer,  and  about  Gridley  threatening  to  have  him 
discharged  in  case  he  did  not  do  as  he  (Gridley)  desired. 

City  and  County  of  New  York,  ss  : 

I,  William  H.  Townley,  of  said  city,  being  duly  sworn,  do  depose  and  say  that  all 
that  portion  of  the  foregoing  paper  which  is  in  my  handwriting  is  a  transcript  of  the 
short-hand  notes  taken  by  me  on  the  20th  of  August,  1870,  of  a  conversation  had  by 
General  George  W.  Palmer  with  Hon.  Thomas  Murphy  on  the  day  previous,  as  related 
to  me  by  said  Palmer,  and  contains,  with  the  addition  made  by  General  Palmer,  the 
substance  of  said  conversation,  as  so  related  to  me.  It  also  alludes  to  the  statement 
made  by  Mr.  Murphy  to  General  Palmer,  relative  to  the  Corrigan  case,  in  my  presence, 
at  the  custom-house,  on  the  said  20th  day  of  August.  This  paper  was  written  out  by 
me  within  a  day  or  two  after  the  said  date,  from  the  short-hand  notes  referred  to,  and 
h  anded  by  me  to  said  Palmer  on  his  return  from  the  country,  about  the  1st  September, 
1870. 

W.  H.  TOWNLEY. 

Sworn  to  before  me  this  23d  day  of  March,  1872. 

JOHN  D.  MORRELL, 

Notary  Public,  New  York  City. 

It  is  true  Mr.  Murphy  denies  the  accuracy  of  this  statement,  but  the 
weight  of  testimony  is  altogether  adverse  to  him.  The  conversation 
was  detailed  in  part  by  General  Palmer  to  his  secretary,  W.  H.  Townley, 
and  the  rest  occurred  in  Mr.  Townley ’s  presence,  at  the  custom-house. 
General  Palmer  has  given  his  reasons  for  having  a  memorandum  made 
of  the  interview,  and  there  was  no  possible  reason  to  anticipate  at  that 
time  the  controversy  which  has  since  arisen. 

Moreover,  Mr.  Murphy’s  declarations  to  General  Palmer  are  entirely 
in  accordance  with  his  subsequent  statements  to  Mr.  William  Atkinson, 
who,  as  well  as  General  Palmer,  had  been  removed  from  official  position 
without  any  charge  of  official  short  coming  or  misconduct,  and  for  the 
sole  reason  that  each  of  them  refused  blind  obedience  to  Mr.  Murphy’s 
political  dictation. 

In  volume  3,  pages  625,  626,  &c.,  will  be  found  Mr.  Atkinson’s  history 
of  Mr.  Murphy’s  offer  to  him  to  barter  and  sell  a  number  of  official 


cxx 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


positions  in  the  custom-house  in  exchange  for  Grant  delegates  to  the 
Syracuse  convention.  We  make  some  extracts : 

By  Mr.  Bayard  : 

Q.  Now,  sir,  tell  us  what  did  cause  your  removal,  and  take  your  own  way.  You 
mentioned  that  you  anticipated  some  action  of  this  kind  for  several  weeks. — A.  I  did, 
sir. 

Q.  State  why  you  anticipated  it,  and  whether  you  believed  the  causes  which  you 
did  anticipate  would  effect  your  removal  were  those  which  subsequently  were  opera¬ 
tive  in  the  case. — A.  There  appeared  to  be  no  fault  found  with  me  ;  there  was  not  any 
fault  found  until  after  the  appointment  of  Mr.  Murphy  to  the  collectorship  of  New 
York.  Coming  on  time  for  holding  the  primary  elections  in  the  city  of  New  York,  to 
elect  delegates  to  the  State  convention  of  1870,  Mr.  Murphy  and  I  happened  to  meet 
on  the  boat  going  to  Long  Branch,  and  he  invited  me  to  step  down  to  the  custom¬ 
house  to  see  him,  which  I  did.  He  commenced  talking  to  me  about  the  delegates  that 
were  likely  to  go  from  my  district  to  the  State  convention.  I  told  him  I  could  not  tell 
him  at  that  time  who  were  likely  to  go. 

Q.  What  district  is  yours  ? — A.  The  sixteenth  assembly  district,  sir.  I  could  not  tell 
Mr.  Murphy  at  that  time  who  was  likely  to  go,  and  he  wanted  that  he  should  have 
the  naming  of  one  delegate. 

Q.  That  he  should  have  ? — A.  I  told  Mr.  Murphy  that  that  was  a  matter  that  I 
would  have  to  leave  with  the  men  of  my  district.  I  was  the  president  of  the  republi¬ 
can  association  in  that  district. 

Q.  You  were  the  president  of  the  republican  association  of  the  sixteenth  assembly 
district  ? — A.  Of  the  sixteenth  assembly  district.  I  told  Mr.  Murphy  that  that  was  a 
matter  entirely  belonging  to  them;  that  I  was  their  president,  and  I  thought  they  had 
confidence  in  me,  but  I  would  not  undertake  to  say  who  should  go  until  the  men  of 
that  district  were  consulted.  He  asked  me  to  allow  him  to  name  one.  I  told  him  that 
I  would  consult  with  my  friends  ;  I  did  so  consult  with  them,  and  had  another  inter¬ 
view  with  Mr.  Murphy. 

Q.  Was  this  at  the  custom-house? — A.  Yes,  sir. 

Q.  At  his  request  ? — A.  At  his  request ;  yes,  sir.  He  then  wanted  to  know  what 
news  I  had  from  the  district.  I  told  him.  He  wanted  that  Mr.  Isaac  H.  Bailey  should 
go  as  a  delegate. 

Q.  He  named  him  ? — A.  Yes,  sir ;  and  I  said  to  Mr.  Murphy  that  my  friends  in  that 
district  were  desirous  of  having  peace  in  the  party,  and  that  they  were  willing  that 
Mr.  Bailey  should  be  sent.  After  that  point  was  settled,  Mr.  Murphy  then  went  on 
and  wanted  the  naming  of  the  other  delegates — the  other  two ;  we  were  to  send  three 
from  our  district  to  the  convention. 

Q.  This  convention  was  at  Syracuse  ? — A.  Saratoga — the  convention  of  1870.  I  told 
him  that  that  could  not  be  ;  that  I  thought  my  friends  had  conceded  enough  for  peace 
sake,  and  that  he  certainly  could  not  be  allowed  to  name  the  others.  He  appeared  to 
be  displeased  with  that;  but  I  had  another  interview  with  him — a  third  interview 
after. 

Q.  Pardon  me  ;  how  far  were  those  interviews  apart,  the  first  and  the  second  ? — A. 
I  have  not  a  very  distinct  recollection  of  that.  It  might  have  been  three  or  four  days, 
perhaps  less. 

Q.  Was  your  third  interview  held  at  the  custom-house  also? — A.  Yes,  sir. 

Q.  In  the  collector’s  room  there? — A.  In  the  collector’s  room  there,  yes,  sir;  in  the 
presence  of  the  postmaster — General  Jones — and  Mr.  Terwilliger. 

Q.  Mr.  James  Terwilliger  ? — A.  Mr.  James  Terwilliger.  Mr.  Murphy  tried  to  pre¬ 
vail  on  me  to  use  my  influence  in  the  district,  to  have  these  men  that  he  would  name 
sent  as  delegates,  and  he  said  he  was  anxious  to  have  peace  and  harmony  in  the  party ; 
that  the  President  of  the  United  States  was  anxious  for  peace  in  the  party,  &c.,  but 
that  he  wanted  to  be  represen  ted  there  in  the  convention. 

Q.  Wanted  what  ? — A.  Wanted  to  be  represented  in  the  convention. 

Q.  Who  did? — A.  The  President  wanted  to  have  his  friends  there  in  the  convention. 

By  Mr.  Howe  : 

Q.  The  President  ? — A.  Yes,  sir. 

By  Mr.  Bayard  : 

Q.  Well,  sir,  who  were  the  two  men  that  he  wanted  in  addition  to  Bailey? — A.  He 
wanted  William  Hudson  Lawrence,  the  then  pension  agent  at  New  York,  as  one,  and 
Frank  E.  Howe  as  the  other. 

Q.  Were  both  of  those  men  residents  of  your  assembly  district  ? — A.  I  believe  they 
were,  sir. 

Q.  Were  they  members  of  this  republican  association  ? — A.  Hudson  Lawrence  was. 
I  won’t  be  certain  about  Mr.  Howe. 

Cj.  Was  Mr.  Bailey? — A.  Mr.  Bailey  was;  yes,  sir. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXXI 


Q.  When  Tie  presented  those  names,  what  was  your  action  ? — A.  I  said  to  Mr.  Mur¬ 
phy  that  that  thing  could  not  he  done ;  that  we  could  not  allow  him  to  name  all  these 
delegates.  He  said  to  me  that  he  was  prepared  to  appoint  four  men  in  the  custom¬ 
house  for  me,  and  if  I  would  present  their  names  to  him,  that  he  would  immediately 
send  their  names  on  to  Washington  and  have  them  appointed. 

Q.  To  Avhat  offices  in  the  custom-house  did  he  propose  to  appoint  four  men  ? — A. 
Two  day-officers  and  two  night-officers. 

Q.  What  you  term  inspectors? — A.  Yes,  sir. 

Q.  What  did  he  say  about  your  sending  him  the  names  of  such  men  as  you  wanted 
appointed  ?— A.  He  said,  if  I  would  send  him  the  names  or  hand  him  the  names  of 
these  men,  that  he  would  appoint  them — send  their  names  on  to  Washington.  I  gave 
him  the  names  of  two  men  on  the  following  day.  • 

Q.  You  gave  him  the  names  of  two  men  ? — A.  Yes,  sir. 

Q.  At  once,  and  while  you  were  in  the  office  there? — A.  No,  sir;  the  following  day. 

Q.  Who  were  the  men  ? — A.  Robert  Kennedy  was  one  and  John  Baxter.  I  think  I 
am  correct  in  naming  those  two  men.  I  might  be  mistaken  in  the  names,  but  I  think 
they  are  the  two  men. 

Q.  Let  me  understand  the  precise  arrangement.  His  statement  was,  he  desired  har¬ 
mony  ? — A.  Yes,  sir. 

Q.  Just  repeat  what  he  said  of  the  President’s  wish  to  be  represented  in  the  eonven-  - 
tion. — A.  He  said  that  the  President  wished  to  have  peace  and  harmony  there  iu  the 
party,  and  that  he  wished  to  have  his  friends  there  in  the  convention — to  be  repre¬ 
sented  by  his  friends ;  and  at  the  same  time  he  gave  me  to  understand  that  Mr.  Gree¬ 
ley  was  the  candidate  of  the  administration  for  governor.  I  said  to  him  that  he  need 
not  fear  on  that  point ;  that  we  were  sure  to  send  a  delegation  from  our  district  that 
would  vote  solid  for  Mr.  Greeley  ;  that  he  might  have  no  fears  whatever.  I  said  then 
to  him,  “Now,  Mr.  Murphy,  let  us  understand  each  other.  Don’t  you  want  simply  to 
have  Chester  A.  Arthur  elected  to  the  State  committee  ?  Isn’t  that  what  you  are  aim¬ 
ing  for,  and  not  the  nomination  of  Mr.  Greeley  ?”  That  is  the  question  I  asked  him. 
He  replied  to  that  by  saying,  “What  objections  have  you  to  Mr.  Arthur?”  I  said  I 
had  not  any  whatever,  but  I  preferred  somebody  else  for  the  State  committee. 

Q.  Was  there  an  issue  then  in  your  party  in  regard  to  your  State  committee;  was 
there  a  struggle  then  to  obtain  control  of  it  ? — A.  There  appeared  to  be  in  our  con¬ 
gressional  district. 

Q.  How  many  members  of  the  State  committee  would  you  be  entitled  to  from  that 
district? — A.  One. 

Q.  Did  you  believe  at  that  time  that  the  chief  object  of  Mr.  Murphy’s  interest  in  the 
matter  was  the  control  of  the  appointment  of  the  State  committee  man  ? — A.  I  did, 
sir. 

Q.  More  than  the  other? — A.  I  did  ;  yes,  sir.  I  believe  it  now. 

Q.  That  the  nomination  of  delegates  to  choose  a  governor  was  secondary  and  sub¬ 
ordinate  to  the  appointment  of  the  State  committee  man? — A.  Yes,  sir;  I  believed  it 
then  and  I  believe  it  now. 

Q.  You  believe  it  now  ? — A.  Yes,  sir. 

Q.  Is  that  why  you  asked  him  that  question? — A.  Yes,  sir. 

Q.  Had  you  reason  then  to  suppose,  and  have  you  had  reason  since  to  have  your 
suppositions  confirmed,  that  Mr.  Murphy  really  cared  to  have  Mr.  Greeley  nominated 
for  governor  ? — A.  I  have  every  reason  to  believe  that  he  did  not  care  for  having  Mr. 
Greeley  nominated,  and  did  not  want  him  nominated. 

Q.  Did  not  want  him  nominated? — A.  Yes,  sir;  that  is  my  opinion. 

Q.  But  what  he  was  really  aiming  at  was  the  control  of  the  State  committee? — 

A.  Yes,  sir. 

Q.  And  that  he  wanted  General  Arthur  put  upon  it? — A.  Yes,  sir ;  put  upon  it. 

Q.  And  that  caused  the  interest  that  he  was  exhibiting  with  you? — A.  That  was  my 
belief,  sir. 

Q.  Have  subsequent  events  confirmed  you  in  that  belief? — A.  Yes,  sir. 

Q.  Have  you  found  out  that  you  were  right  in  it? — A.  Yes,  sir. 

Q.  *Do  you  now  know  that  it  was  so? — A.  I  am  satisfied  that  it  was  so ;  yes,  sir. 

Q.  When  he  made  the  proffer  to  you  that  you  should  have  the  nomination  of  four 
men,  or  that  four  places  in  the  custom-house  should  be  put  under  your  control,  did 
you  assent  to  that  arrangement  ? — A.  I  thanked  him  for  it ;  said  the  district  that  I 
represented  had  very  few  appointments  in  place.  He  then  proposed  appointing  me  a 
weigher. 

Q.  In  the  custom-house  ? — A.  In  the  custom-house.  Ho  said  that  in  two  weeks’ 
time  from  that  he  would  appoint  me  as  a  weigher,  aud  said,  “  If  you  wish  it,  I  will  ap¬ 
point  you  now.  Have  your  papers  made  out  now,  before  you  leave  your  seat,  for  the 
position  of  gauger.” 

Q.  Of  what? — A.  Of  gauger. 

Q.  Had  you  had  any  talk  with  him  prior  to  that  time  ;  had  you  made  any  application 
for  either  of  these  appointments  ?— A.  No,  sir ;  I  never  made  application  for  a  position 
in  the  custom-house. 


CXXII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Q.  Did  the  proposition  originate  with  him  then  and  at  that  moment  ? — A.  Yes,  sir. 
I  never  made  an  application  for  a  position  in  the  custom-house. 

A  farther  extract  from  the  testimony  of  the  same  witness  will  throw 
light  on  the  character  and  practices  of  some  of  the  more  prominent  men 
demanded  as  delegates  by  Mr.  Murphy,  in  order,  as  he  said,  that  the 
President  might  u  have  his  friends  there  in  the  convention.”  The  elec¬ 
tion  for  delegates  having  taken  place,  the  vote  stood  from  34  to  46  for 
the  custom-house  ticket,  and  234  for  the  other  ticket. 

By  Mr.  Bayard  : 

Q.  Were  those  thirty-four  men  the  custom-house  strength  or  the  strength  of  the 
Federal  officials  in  that  district? — A.  That  was  just  about  it,  sir;  just  about  as  near 
as  I  can  figure  it  out,  about  the  number  of  men  they  had  holding  positions  in  the 
post-office,  some  of  them  my  personal  friends.  After  the  primary  election,  and  when 
we  went  to  Saratoga  as  delegates,  this  Hudson  Lawrence  presented  himself  there  with 
a  paper  purporting  to  be  sworn  by  some  seventy  men,  members  of  our  republican 
organization  in  that  sixteenth  district,  and  he  claimed  that  all  these  men  had  sworn 
that  they  attended  the  primary  election  and  that  they  voted  the  opposition  ticket.  I 
was  permitted  to  glance  at  the  paper  by  the  chairman  of  the  committee  on  credentials, 
and  I  said  that  I  was  prepared  to  j)rove  that  some  of  the  men  on  that  paper  had  not 
been  at  the  primary  election  at  all ;  that  the  paper  was  a  forgery.  The  commissioner 
of  deeds,  whose  name  was  signed  to  it,  acknowledged  to  me  afterward  that  there  were 
but  thirty  or  forty  names  on  it  when  he  swore  them,  and  that  they  cut  the  paper 
apart  and  slipped  in  the  other  names,  and  then  they  pasted  the  part  of  the  paper  that 
his  name  was  on  at  the  bottom,  making  the  list  appear  to  be  seventy,  or  thereabouts, 
in  number. 

Q.  So  'as  to  obtain  his  attestation  and  authentication,  apparently,  to  a  number  of 
names  that  were  not  before  him  ? — A.  Yes,  sir. 

Q.  Did  you  see  that  paper? — A.  I  did,  sir. 

Q.  Was  it  pieced  in  that  way,  as  you  describe  ? — A.  It  was;  yes,  sir.  The  commis¬ 
sioner  of  deeds,  Richard  M.  Lush ;  I  was  talking  with  him  about  it  the  other  day ;  he 
acknowledged  it,  just  as  I  told  you  ;  that  that  was  so. 

Q.  Who  was  the  person  that  presented  this  paper? — A.  William  Hudson  Lawrence, 
the  then  pension-agent  at  New  York ;  he  was  the  man  that  contested  our  seats. 

Q.  What  is  his  position  now;  is  he  still  pension-agent  ? — A.  I  believe  not;  I  believe 

he  is  a  defaulting  pension-agent ;  I  believe  he  is  a  defaulter. 

#  *  *  *  *■  *  # 

Q.  Did  any  of  your  friends  get  a  sight  of  that  paper  at  that  time  except  yourself? — 
A.  I  don’t  recollect  that  anybody  did  except  General  Foster,  and  I  don’t  think  he  had 
time  enough  to  look  it  over.  I  requested  the  chairman  of  the  committee  to  let  me 
have  this  paper.  I  told  him  they  were  all  forgeries,  and  sworn  to  falsely.  The  com¬ 
missioner  of  deeds  was  standing  present  in  the  room,  and  I  appealed  to  him.  Says  I, 
“If  this  commissioner  says,  on  his  oath,  that  he  has  sworn  all  of  these  men,  I  will 
abandon  this  case.” 

Q.  That  was  the  commissioner  before  whom  the  attestation  was  taken? — A.  Yes, 
sir;  and  he  being  one  of  their  friends  also,  the  moment  he  heard  me  allude  to  him  he 
started  and  ran  out  of  the  door. 

Q.  What  was  his  name  ? — A.  Lush.  We  could  not  find  him  any  more  that  afternoon 
until  the  case  was  decided  against  us. 

The  result  was  that  the  witness  was  removed,  on  orders  from  Wash¬ 
ington,  from  his  place  as  captain  of  the  watch  of  the  new  post-office  at 
New  York,  a  place  which  he  had  not  sought,  but  accepted  originally  on 
the  urgency  of  Frederick  A.  Conkling,  esq.,  of  New  York,  as  the  best 
man  to  organize  the  watch.  (See  volume  3,  page  624.)  We  give  a  por¬ 
tion  of  his  testimony  as  to  the  removal : 

By  Mr.  Bayard  :  * 

Q.  To  what  do  you  attribute  your  removal  from  the  place  that  you  held  under  the 
Government,  as  captain  of  the  watch? — A.  To  my  refusal  to  consent  to  Mr.  Murphy 
namiug  the  delegates  to  the  republican  State  convention  of  1870.  I  would  like  further 
to  state  that  a  letter  was  written  to  Mr.  Hulburd.  Several  gentlemen,  I  understood, 
had  gone  down  to  his  office  and  demanded  my  removal. 

Q.  Did  you  understand  who  they  were  ? — A.  This  Hudson  Lawrence  was  one,  and  I 
was  told  there  were  several  others.  They  were  not  named  to  me.  Mr.  William  Orton 
wrote  a  letter  to  Mr.  Hulburd  demandiug  my  immediate  removal. 

Q.  Did  he  state  any  reason  for  it? — A.  Yes,  sir ;  that  I  was  an  enemy  to  the  friends 
of  the  President  of  the  United  States  in  this  city. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXXIII 


Q.  An  enemy  to  the  friends  of  the  United  States  ? — A.  An  enemy  to  the  friends  of  the 
President  of  the  United  States  in  this  city.  Those  were  the  words,  I  believe.  The  let¬ 
ter  is  now  on  tile  in  the  office  of  the  superintendent  of  that  building. 

Q.  You  saw  it  ? — A.  Yes,  sir.  Mr.  Hulburd  paid  no  attention  to  that  letter.  He  paid 
no  attention  to  any  demand  that  was  made  upon  him  for  my  removal.  Mr.  Orton 
stated  in  liis  letter  that  he  had  written  this  letter  to  Mr.  Hulburd  in  order  that  he 
[Orton]  might  be  saved  the  trouble  of  coming  to  Washington. 

*  *  *  # 


Q.  Was  the  objection  to  you  entirely  based  upon  your  action  within  your  own  party, 
as  you  described  it  to  us  ? — A.  Yes,  sir  ;  it  appeared  to  be. 

Q.  Was  there  any  other  cause  respecting  and  affecting  your  personal  character — your 
fitness  for  the  place  ? — A.  None  that  I  ever  knew  of. 

Q.  None  ever  brought  to  your  knowledge? — A.  No,  sir.  I  will  submit  a  letter,  if  you 
will  allow  me,  that  Mr.  Mullett  himself  wrote  about  six  weeks  before  he  sent  the  order 
to  dismiss  me. 

Q.  Read  it.— A. 


“  Treasury  Department, 

“  Office  of  the  Supervising  Architect, 

“  August  31,  1870. 

“  Dear  Sir  :  Your  note  of  the  29th  instant  is  received.  In  reply  I  have  to  say  that  I 
have  no  recollection  of  directing  Mr.  Hulburd  to  dismiss  Captain  Atkinson,  and  can 
assure  you  that  I  never  interfere  in  such  matters  without  sufficient  cause.-  In  this  case 
I  have  no  ground  of  complaint  against  Captain  Atkinson.  So  far  as  I  know,  he  has 
performed  his  duty,  and  he  has  certainly  always  been  very  polite  and  courteous  to  me. 

“  Truly  yours, 

“  A.  B.  MULLETT. 


“  Hon.  Thomas  E.  Stewart, 

“  New  York  City.” 

Q.  Who  is  Mr.  Stewart  ? — A.  He  is  a  friend  of  mine,  sir. 

Q.  Both  personal  and  political  ? — of  the  same  party  as  yours? — A.  Yes,  sir. 

Q,  Did  Mr.  Stewart  write  that  letter  to  Mr.  Mullett  to  discover  whether  there  was 
any  disposition  to  remove  you  ? — A.  I  think  he  did,  sir — not  at  my  request — he  did  not. 
I  might  have  been  telling  Mr.  Stewart,  in  talking  with  him,  that  I  expected  to  be  dis¬ 
missed  ;  that  I  did  not  want  to  be  dismissed.  I  did  not  want  to  be  removed.  That  was 
the  reason  why  I  insisted  on  Mr.  Hulburd’s  accepting  my  resignation,  because,  as  I  said 
before,  I  never  wanted  the  position.  I  never  sought  it ;  I  didn’t  want  to  take  it  in  the 
first  place. 

Q.  You  preferred  to  go  out  upon  your  own  motion  instead  oi  going  out  apparently 
involuntarily  ? — A.  Yes,  sir. 

Q.  Did  you  say  you  did  read  Mr.  Mullett’s  order  directing  your  removal  ? — A.  No,  sir; 
I  did  not. 

Q.  I  understand  from  this  letter  that  you  had  been  a  member  of  the  republican  party 
from  its  origin,  in  1856,  I  think  ? — A.  Yes  sir. 

Q.  Had  your  action  been,  up  to  that  date,  consistently  and  steadily  in  the  interests  of 
that  party  ?— >A.  Yes,  sir. 

Q.  Had  you,  in  any  way,  acted  with  other  political  parties,  so  as  to  endanger  in  any 
degree  the  success  of  your  own  ? — A.  No,  sir  ;  never  knowingly. 

Q.  Were  persons,  at  the  election  of  delegates  which  you  have  spoken  of  to  the  State 
convention,  permitted  to  vote  who  were  not  entitled  to  ? — A.  Not  that  I  know  of,  sir. 
I  have  stated  before  that  it  was  one  of  the  fairest  primary  elections  I  ever  saw  held,  in 
my  judgment. 


* 


Mr.  0.  T.  Hulburd,  the  superintendent  of  the  post-office  building,  was 
unwilling  to  remove  Atkinson  without  cause.  Finally,  the  order  came 
from  Washington,  from  Mr.  Mullett  himself,  who  had  suddenly  changed 
his  mind. 

Q.  When  Mr.  Hulburd  did  discharge  you,  did  he  express  to  you  regret  at  your  leav 
ing  ?— A.  He  did,  sir ;  and  he  stated  to  me,  further,  that  it  was  his  intention  to  resign 
his  own  office.  He  felt  that  it  was  very  wrong,  and  he  felt  if  he  could  not  keep  a  man 
in  whom  he  had  confidence,  whom  he  knew  had  discharged  his  duties  well  and  faith¬ 
fully,  that  he  was  not  worthy  of  holding  the  position  that  he  was  holding  himself,  and 
that  he  intended  that  night  to  write  his  own  resignation.  He  told  me  afterward  that 
he  had  been  requested  by  some  parties  here  not  to  resign,  and  he  also  told  me  that 
after  I  left  there  the  watch  was  demoralized,  and  that  lip  had  to  take  charge  of  it  him¬ 
self  ;  in  fact,  that  he  had  to  give  his  personal  attention  to  the  watch  himself.  Mr. 
Hulburd  felt  very  bad  about  my  being  removed,  a  great  deal  worse  than  I  did,  because 
I  did  not  care  for  the  position  at  all. 

S.  Rep  227. - x 


CXXIV 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


By  Mr.  Pratt  : 

Q.  Who  did  Mr.  Hulburd  tell  you.  the  order  came  from  for  your  removal? — A.  From 
Mr.  Mullett. 

Q.  How  long  was  this  after  your  friend  Mr.  Thomas  E.  Stewart  had  received  this 
letter  from  Mr.  Mullett  ?— A.  I  think  it  was  about  six  weeks.  The  letter  is  dated  the 
30th  of  August. 

Q.  About  six  weeks  after  that  ? — A.  Yes,  sir. 

Q.  Did  Mr.  Hulburd  tell  you  that  he  had  received  the  order  from  Mr.  Mullett  for 
your  removal  ? — A.  Yes,  sir. 

Q.  Did  you  see  that  order  ? — A.  I  did  not. 

Q.  Did  he  tell  you  what  reasons  were  assigned  ? — A.  He  did  not,  sir. 

Q.  Do  you  know  what  reasons  were  assigned  by  Mr.  Mullett  ? — A.  I  do  not,  sir. 

Q.  You  held  that  office  of  captain  of  the  watch  from  August,  1869,  to  October,  1870, 
the  time  you  were  removed  ? — A.  Yes,. sir. 

Q.  Had  you  any  authority  or  control  over  the  general  laborers  employed  in  working 
upon  the  building  ? — A.  None,  except  that  wdiile  working  at  night  some  of  them  would 
lie  down  and  stow  themselves  away  to  sleep,  and  it  was  the  duty  of  the  watchman  to 
see  that  they  did  not  do  that. 

Q.  Was  the  labor  carried  on  during  the  night-time  as  well  as  the  day  ?— A.  Yes, sir; 
for  probably  some  six  weeks  or  two  months. 

Of  the  like  character  was  Mr.  Murphy’s  attempted  negotiation  with 
Mr.  James  L.  Hasty  for  another  exchange  of  official  patronage  for  dele¬ 
gates  to  the  republican  State  convention  at  Saratoga,  in  1870.  (See 
testimony  of  Mr.  Hasty,  volume  3,  page  702 :) 

Q.  Did  you  go  to  the  Saratoga  convention  ? — A.  Yes,  sir;  I  was  a  delegate  elected  to 
that  convention. 

Q.  This  committee  is  instructed  to  inquire  in  regard  to  what  control  was  exercised 
by  the  New  York  custom-house  officials  over  either  of  the  republican  conventions  of 
1870  and  1871.  The  Saratoga  convention,  I  understand,  was  in  1870? — A.  Yes,  sir; 
1870. 

Q.  You  say  you  were  a  delegate  there? — A.  I  was  a  delegate  to  the  convention. 

Q.  What  do  you  know  of  any  control  or  attempted  control  by  the  custom-house 
officials,  or  by  any  one  of  them,  of  delegates  to  that  convention  ? — A.  Yes,  sir ;  there 
was  an  attempt  made  to  control  delegates  in  our  district.  A  gentlemau  called  on  me, 
representing  himself  from  Collector  Murphy,  and  also  from  Governor  Morgan,  who 
lives  in  our  district,  saying  that  Collector  Murphy  'would  like  Governor  Morgaa  to  go 
as  a  delegate  to  the  Saratoga  convention.  I  stated  to  him  that  the  committee  would 
meet  that  night,  and  I  should  mention  the  matter.  He  stated  he  understood  that  I  was 
likely  to  be  named  as  a  delegate  to.  that  convention.  I  told  him  I  did  not  know  how 
that  was  ;  that  it  was  left  entirely  with  the  executive  committee  ;  and  he  said,  “Now, 
it  is  for  your  interest  to  become  friendly  writh  Governor  Morgan.”  Said  he,  “  You  come 
with  me  now,  and  I  will  introduce  you  to  the  governor.  I  will  take  you  to  his  house, 
and  he  can  insure  you  of  the  patronage  of  the  district  from  the  custom-house.”  I  de¬ 
clined  to  go  with  him,  and  he  said  that  he  would  call  in  on  the  morning  following. 
The  morning  following  he  came  in  my  store,  and  asked,  “  What  success  ?”  I  told  him 
the  committee  had  decided  not  to  send  Mr.  Morgan  ;  that  if  Mr.  Morgan  wished  to  go 
as  a  delegate,  his  friends  must  run  him  in  the  district,  and  take  his  chances  of  an  elec¬ 
tion.  Well,  he  said,  “  He  was  very  sorry ;  that  Mr.  Murphy  would  like  him  to  go.” 

Q.  That  is  Mr.  Thomas  Murphy,  the  collector  of  the  port? — A.  Yes,  sir. 

Q.  Then  he  was  collector  at  that  time  ? — A.  Yes,  sir.  He  said  that  Collectbr  Murphy 
wanted  Governor  Morgan  to  go,  and  he  said  he  thought  that  the  opposite  interest  had 
.controlled  the  district  long  enough  ;  that  they  must  break  this  thing  up  ;  and  he  said, 
pulling  a  letter  out  of  his  pocket  which  he  represented  was  from  Collector  Murphy — it 
had  Murphy’s  name  to  it ;  I  do  not  know  his  writing,  but  he  represented  it  was  from 
Collector  Murphy — assuring  me  whatever  bargain  this  gentleman  made  he  would  faith¬ 
fully  observe  :  to  take  a  sheet  of  white  paper,  and  name  any  position  for  myself  in  the 
custom-house,  and  our  friends  in  the  eleventh  district.  I  told  him  that  our  friends 
the  previous  evening  had  made  up  the  ticket,  and  of  course  I  could  not  change  it.  He 
urged  that  I  should  let  the  matter  go  until  the  evening,  and  consent  to  a  ticket  with 
Governor  Morgan’s  name  on,  leaving  my  own  off,  and  then  it  would  be  too  late  in  the 
evening  to  make  any  change.  I  positively  declined  to  do  any  such  thing.  He  then 
asked  if  I  would  not  meet  him  down  at  Collector  Murphy’s  office  at  2  o’clock  that  same 
day. 

Q.  Was  Collector  Murphy  at  that  convention  ? — A.  Yes,  sir. 

Q.  Did  you  observe  any  custom-house  officials  there  ? — A.  t),  yes  ;  there  were  a  great 
many.  I  will  state,  for  the  information  of  the  committee,  that  the  fight  was  on  ob¬ 
taining  the  member  of  the  State  committee.  The  member  of  the  State  committee  is 
elected  by  the  delegates  from  the  various  congressional  districts.  Our  congressional 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXXV 


district  is  made  up  of  four  assembly  districts — the  eleventh,  fifteenth,  sixteenth,  and 
eighteenth  assembly  districts.  These  four  districts  constitute,  I  think  it  is,  the  eighth 
congressional  district,  if  I  am  not  mistaken.  It  is  the  one  that  Mr.  Brooks  represents. 
These  men  name  the  member  of  the  State  committee  for  the  year.  The  custom-house 
wanted  Chester  A.  Arthur,  who  is  now  collector  of  the  port  of  New  York,  and  they 
adopted  these  means  of  obtaining  a  majority  of  the  committee  to  name  Mr.  Arthur  tor 
the  member  of  the  State  committee,  when  they  could  not  manage  it  by  securing  the 
delegates  in  New  York.  When  we  got  to  Saratoga,  they  got  up  a  contesting  delega¬ 
tion  from  the  sixteenth  assembly  district,  and  they  put  in  a  claim  there  that  these  dele¬ 
gates  were  elected  instead  of  the  true  delegates  ;  and  the  custom-house  controlling  the 
convention,  they  controlling  the  committee  on  credentials,  gave  the  seats  to  these  con  ¬ 
testing  delegates  on  a  fraudulent  affidavit.  The  regular  delegation  for  that  district 
was  thrown  out.  They  were  composed  of  General  Foster,  William  Atkinson,  and  a 
third  one — 1  do  not  remember  who  he  was  now.  They  were  thrown  out,  and  a  dele¬ 
gation  admitted  to  seats  favorable  to  Chester  A.  Arthur  as  a  member  of  the  State  com¬ 
mittee.  That  was  the  history  of  that  performance. 

Q.  What  was  the  offer  made  by  Mr.  Murphy’s  agent  to  you  ?  Just  repeat  that  offer 
made  by  him  in  case  you  would  leave  your  place  upon  the  ticket  and  allow  Mr.  E.  D. 
Morgan  to  go  to  the  convention  in  your  stead. — A.  That  I  could  take  a  sheet  of  white 
paper  and  write  my  own  terms  for  myself  and  friends  in  the  district.  Any  positions 
that  I  would  choose  to  select  would  be  given. 

Q.  Positions  in  the  United  States  service  in  the  custom-house? — A.  In  the  United 
States  service,  for  myself  and  friends.  Take  a  sheet  of  white  paper  and  write  out  my 
Own  selections. 

Mr.  William  H.  De  Camp,  whose  testimony  is  to  he  found  (volume  1, 
pages  492  to  494,  and  volume  3,  pages  432,  433)  was  an  entry  clerk  in  the 
naval  office,  and  gives  the  following  statement  of  Mr.  Murphy’s  negotia¬ 
tions  with  him.  He  is  describing  a  meeting  of  the  general  committee  of 
the  republican  party. 

The  witness  had  testified,  (volume  1,  page  492,)  as  many  others  had 
done,  to  the  existence  of  three  rival  republican  general  committees  in 
the  city  of  New  York,  each  representing  a  distinct  organization  claim¬ 
ing  for  itself  sole  regularity  and  authority  ;  and  that  in  the  fall  of  1870 
a  reorganization  of  the  party  was  attempted,  as  ordered  by  the  re¬ 
publican  State  central  committee.  The  effort  of  Collector  Murphy  and 
his  friends  was  to  get  control  of  the  Twenty-second-street  general  com¬ 
mittee,  as  being  the  most  important  of  the  three,  though  against  the 
custom-house,  having  twice  as  many  votes  in  the  proposed  reorganiza¬ 
tion  as  each  of  the  other  two.  The  three  committees  elected  a  com¬ 
mittee  of  twelve,  which  stood  6  and  6.  The  witness  He  Camp  was, 
however,  unanimously  elected  chairman.  Then  commenced  the  efforts 
of  the  collector  and  the  custom-house.  The  witness  testified  : 

By  Mr.  Casserly  : 

Q.  That  [the  Twenty-second-street  organization]  was  your  organization  ? — A.  Yes, 
sir.  *  *  *  Before  the  general  committee  was  called  together,  it  was  ascertained  that 

a  great  many  persons  not  members  of  the  committee,  and  not  entitled  to  admission,  had 
gained  admission  through  the  windows  on  Twenty-second  street  by  means  of  ladders,  as 
I  understood.  When  the  committee  was  called  together,  there  was  considerable  disturb¬ 
ance  and  confusion.  Mr.  Murphy  was  present,  and  took  part  at  that  meeting  ;  but  the 
committee  was  finally  organized  by  the  election  of  General  Cochrane  as  chairman  ;  a  tem¬ 
porary  chairman  was  elected  ;  and  at  the  next  meeting  General  Cochrane  was  elected  as 
permanent  chairman.  Upon  Mr.  Murphy  being  appointed  collector,  his  desire  seemed  to 
be  to  get  control  of  the  general  committee,  and  also  '  of  the  organizations ;  and  two  or 
three  meetings  of  the  general  committee  were  hold,  at  which  a  vote  was  taken,  and  they 
were  pretty  evenly  divided.  I  was  not  a  member  of  the  general  committee,  but  I  was 
present  at  the  meeting.  Now,  coming  back  to  my  interview  with  Mr.  Murphy,  after 
his  appointment  as  collector,  I  say  that  before  our  arrangement  was  finally  effected, 
Mr.  Murphy  asked  me  what  salary  I  received  in  the  naval  office.  I  stated  to  him  the 
salary  of  the  office. 

Q.  State  what  it  was. — A.  Two  thousand  two  hundred  dollars.  He  said  I  was  enti¬ 
tled  to  a  better  position  than  that,  and,  besides,  1  was  too  much  confined  there  ;  that 
they  desired  to  have  me  attend  more  to  political  business,  and  he  said  to  me  that  I 
could  have  such  a  position  as  I  desired.  I  at  once  told  him  that  I  was  satisfied  with 
the  position  I  held,  and  preferred  to  attend  to  the  duties  of  the  office.  I  declined  his 
offer,  but  subsequently  1  went  in  with  the  arrangement;  we  agreed  upon  the  delegates 


CXXYI 


NEW  YORK  CUSTOM  HOUSE  INVESTIGATION. 


to  the  committee,  Mr.  Murphy’s  desire  being  that  the  delegates  should  vote  for  Mr. 
Opdyke  as  a  member  of  the  State  committee  ;  that  they  agreed  to  do.  I  now  called 
at  Mr.  Murphy’s  office  after  tty  meeting  of  the  first  convention,  but  some  week  or  two 
after  that  I  understood  that  some  parties  had  called  upon  Mr.  Grinnell  to  request,  as  a 
primary  was  coming  on,  that  he  should  direct  me  to  appoint  certain  parties  as  inspect¬ 
ors  of  election  at  the  primary. 

Mr.  Grinnell  was  at  that  time  naval  officer,  and  the  witness  was  a 
clerk  under  him. 

Q.  Who  called  upon  him  to  urge  him  about  this  ? — A.  James  M.  Thompson  and 
\Villiam  Haw,  jr. 

Q.  Thompson  was  appointed  weigher  ? — A.  Yes,  sir  ;  they  wanted  him  to  ask  me  to 
appoint  certain  persons  as  inspectors  that  they  should  name  ;  Mr.  Grinnell  declined  to 
do  so,  as  he  informed  me  the  same  day  when  I  came  into  the  office.  Just  as  they  left  I 
came  in  ;  I  had  been  absent  attending  to  my  duties  at  the  steamer,  and  about  3  o’clock 
in  the  afternoon,  when  I  went  into  the  office,  they  were  just  about  leaving.  The  pri¬ 
mary  election  was  held,  and  I  appointed  the  inspectors  myself,  as  I  had  always  been 
in  the  habit  of  doing,  without  any  dictation  from  any  one.  Some  few  days  after  the 
primary,  Mr.  Grinnell  notified  me  that  he  had  received  an  order  from  Washington 
directing  my  removal,  at  the  same  time  saying  that  he  regretted  it  very  much,  as  he 
considered  me  one  of  the  mo$t  efficient  and  attentive  clerks  in  his  department,  and 
one  of  the  best  republicans. 

Q.  Was  that  communication  from  Mr.  Grinnell  to  you  orally  or  in  writing  ? — A. 
Orally. 

Q.  What  did  Mr.  Grinnell  tell  you  ? — A.  Mr.  Grinnell  told  me  that  he  himself  had  re¬ 
ceived  an  order  from  Washington  directing  my  removal.  Mr.  Grinnell  was  the  naval 
officer,  and  had  the  power  of  removal. 

Q.  From  whom  did  the  order  come  directing  him  to  remove  you  ? — A.  The  order 
came  in  writing,  as  Mr.  Grinnell  said,  directing  him,  was  from  Mr.  Boutwell,  but  I  un¬ 
derstood  afterward  that  it  came  originally  from  the  President,  and  my  information 
was  that  it  was  on  the  representation  of  parties  sent  there  by  Mr.  Murphy.  Of  course, 
as  to  that  fact,  I  know  nothing,  as  I  never  went  to  Washington,  and  never  inquired 
of  the  authorities  in  regard  to  it. 

Q.  The  effort  was  first  made  to  get  Mr.  Grinnell  to  influence  you,  and  that  failed? — 
A.  Yes,  sir. 

Q.  And  after  that  the  fact  was  accomplished  by  reaching  over  his  head  and  inducing 
a  higher  influence  to  exercise  itself? — A.  Yes,  sir. 

Q.  When  were  you  removed  ? — A.  I  believe  I  have  the  notice  here.  I  desired  Mr. 
Grinnell  to  state  the  facts  in  the  notice,  but  he  said  that  he  wished  not  to  state  the 
facts  ;  that  the  order  came  from  Washington  ;  that  it  might  be  considered  out  of  |)lace. 
He  gave  me  this  notice,  stating  that  my  position  had  ceased,  and  a  successor  had  been 
nominated  and  confirmed  in  my  place.  It  is  dated  the  22d  of  October,  1870. 

Q.  Was  any  charge  of  any  kind  brought  against  you,  to  your  knowledge  ? — A.  None 
was  ever  brought,  to  my  knowledge,  and  Mr.  Grinnell  said  that  no  charge  had  ever  b$en 
made  against  me  in  respect  to  my  official  duties  or  tho  performance  of  my  official  duties. 

*  *  if  #  .  *  if  if 

Mr.  Murphy  did  not  attempt  to  make  any  denial  of  Mr.  De  Camp’s  tes¬ 
timony,  which  was  given  in  his  presence. 

TRAFFIC  IN  SINECURES. 

At  page  665,  volume  2,  will  be  found  the  testimony  of  Mr.  Thomas  H. 
Eightmeyer,  whom  Mr.  Murphy  appointed  an  inspector  of  customs,  with 
the  express  understanding  that  Eightmeyer  should  perform  no  services. 
He  held  this  office,  never  did  an  hour’s  work,  and  drew  the  pay  until 
Mr.  Murphy  turned  him  out  on  account  of  a  difference  of  opinion  be¬ 
tween  them  respecting  some  delegates  to  a  convention. 

We  might  multiply  instances  to  show  that  Mr.  Murphy  treated  the 
official  positions  in  the  custom-house  as  so  much  merchandise,  to  be  bar¬ 
tered  and  sold  in  what  he  might  choose  to  regard  as  the  interest  of  his 
political  party. 

His  influence,  however,  in  this  regard  seemed  to  extend  beyond  the 
custom-house  departments.  We  find  in  the  testimony  of  Mr.  George 
H.  Van  Cleft,  volume  1,  page  435,  that  he,  (Van  Cleft,)  being  regularly 
commissioned  as  a  civil  engineer  in  the  United  States  Navy,  was 
stationed  at  the  Brooklyn  navy-yard.  W7hen  tbe  contest  for  choice  of 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXXVII 


delegates  to  tlie  convention  of  1870  arose,  Mr.  Murphy  desired  to  control 
the  delegation  in  the  eighteenth  assembly  district,  and  differed  from 
Mr.  Yan  Cleft  on  the  subject.  Murphy  threatened  his  removal  from 
office.  Of  course  he  succeeded  in  effecting  it. 

Here  is  Mr.  Van  Cleft’s  history  of  the  transaction  : 

By  Mr.  Bayard  : 

Q.  Proceed,  in  your  own  way. — A.  Within  ten  (lays,  I  think,  after  the  primary,  I 
again  learned  that  a  consultation  had  been  held  in  the  custom-house  in  relation  to  my 
removal,  or  rather  the  subject  of  my  removal  seemed  to  be  settled,  and  it  was  as  to 
who  should  have  the  place.  A  friend  informed  me  of  this  consultation.  That  evening 
I  went  to  Washington  again  and  saw  Commodore  Ammen.  He  told  me  he  thought  I 
was  unnecessarily  troubled  about  the  matter ;  that  he  was  confident  that  the  transfer 
or  removal  would  not  take  place  without  consultation  with  him. 

Q.  What  was  the  date  of  that  ? — A.  October  27 ;  the  very  day  of  my  suspension,  or 
the  day  before  that — the  26th. 

Q.  How  long  before  that  was  it  that  Mr.  Murphy  made  this  threat  that  you  should 
be  removed  before  Saturday  night  ? — A.  I  think  it  was  about  the  middle  of  October 
the  primary  took  place  ;  perhaps  the  17th  of  October.  Commodore  Ammen  volunteered 
to  go  and  see  the  President  with  me  himself.  We  went  over  to  the  President’s  man¬ 
sion,  and  learned  that  he  was  particularly  engaged  with  some  gentlemen.  The  com¬ 
modore  informed  me  that  he  could  not  remain  there ;  that  he  would  introduce  me  to 
General  Dent,  and  request  of  the  general  that  I  should  be  introduced  to  the  President 
as  soon  as  possible,  and  he  would  inform  General  Dent  of  his  desire  in  the  matter. 
We  were  taken  by  General  Dent  into  his  office,  and  Commodore  Ammen  told  him  there 
in  my  presence  that  there  seemed  to  be  a  desire  on  the  part  of  some  New  York  people 
to  have  me  removed  or  transferred ;  that  it  was  his  desire  I  should  remain  at  the 
Brooklyn  navy-yard.  General  Dent  asked  if  there  were  any  political  objections  or 
political  reasons  why  I  should  be  transferred.  I  told  him  i  presumed  that  was  all 
there  was  of  it.  He  asked  me  if  the  proposed  coalition  with  Jimmy  O’Brien,  or  young 
democracy  wing  of  the  democratic  party,  had  anything  to  do  with  it.  I  told  him  that 
was  the  principal  reason,  I  presumed — my  refusal  to  co-operate  with  that  movement. 
He  then  informed  mo  he  thought  the  President  was  particularly  anxious  that  that 
movement  should  succeed,  but  said  that  he  would  introduce  me,  and  I  should  state  my 
own  case.  My  card  was  sent  in.  I  remained  there  from  12  o’clock,  or  perhaps  earlier, 
until  3.30  ;  word  came  out  that  the  President  had  gone  out.  I  went  again  the  next 
morning  early,  before  12,  with  a  friend  from  Washington,  and  he  sent  in  a  card  and 
we  sat  there  perhaps  an  hour  or  an  hour  and  a  half,  when  the  same  card  he  sent  in 
came  out' with  this  written  upon  it,  “  Refer  Mr.  Van  Cleft  and  Mr.  King  to  the  Secretary 
of  the  Navy.”  I  am  told  this  is  the  President’s  handwriting,  [exhibiting  a  card.] 

Q.  Who  identified  that  as  his  handwriting  ? — A.  Major  King ;  and  he  told  me  that  it 
was  in  the  handwriting  of  the  President.  We  went  immediately  to  the  Secretary  of 
the  Navy’s  office,  or  at  least  I  did,  and  I  was  informed  .by  him  that  the  President  had 
decided  under  the  tenure-of-office  law.  I  asked  the  Secretary  of  the  Navy  if  there  were 
charges,  and  I  think  from  his  manner  that  he  was  about  to  make’  some  reply,  when  he 
corrected  himself,  or  said  perhaps  he  had  better  say  nothing  upon  that  subject.  I  then 
asked  him  if  the  order  could  not  be  withheld  for  a  day  or  two  )  that  perhaps  I  would 
resign ;  and  he  said  he  would  hold  it.  I  came  home  that  evening,  and,  on  consultation 
with  some  friends,  it  was  decided  that  I  could  not  resign,  and  so  I  informed  the  Sec¬ 
retary. 

Q.  By  letter  ? — A.  Yes,  by  letter,  on  Saturday  morning,  and  I  think  it  was  on  Thurs¬ 
day  the  order  which  I  have  shown  arrived  at  the  navy-yard,  and  was  given  to  me,  I 
think,  about  the  1st  or  2d  of  November.  That  is  about  as  far  as  I  can  recall  the  subject 
now — the  history  of  my  case. 

******** 

No  charges  affecting  the  witness’s  official  fidelity  or  capacity  were 
ever  made. 

By  Mr.  Casserly  : 

Q.  To  whom  were  you  ordered  to  report  for  duty,  and  by  whom  ? — A.  By  the  Secre¬ 
tary  of  the  Navy,  to  report  to  the  rear-admiral,  Godon,  at  the  navy-yard. 

Q.  You  were  assigned  for.  duty  at  the  navy-yard  by  him  ? — A.  Yes. 

Q.  And  you  continued  to  perform  your  duties  under  him  ? — A.  Yes,  sir. 

Q.  Are  you  aware  of  any  complaint  from  him,  or  any  other  officer,  connected  with 
your  official  duties,  against  you  for  anything  ? — A.  No,  sir  ;  on  the  contrary,  I  have  a 
letter  from  him  which  seemS  to  express  an  entire  satisfaction  with  the  performance  of 
my  duties. 

[Letter  read  in  evidence  by  the  witness,  dated  January  6,  1871.  ] 


CXXVIII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


When  first  informed  by  rumor  that  he  was  to  be  removed,  he  called 
on  Commodore  Ammeu,  the  head  of  his  Bureau,  in  Washington.  He 
says: 

I  went  to  Washington  and  saw  Commodore  Ammeii,  the  chief  of  the  Bureau,  under 
whose  cognizance  I  was  operating;  he  told  me  I  need  have  no  fear  of  the  rumor;  that 
the  department  was  conducted  to  his  entire  satisfaction,  and  that  no  removal  would  be 
made  without  his  knowledge.  He  told  me  I  need  have  no  fear  at  all ;  that  I  could  go 
home  feeling  that  I  should  remain  at  the  yard.  I  did  so. 

*******  * 

Afterward,  hearing  that  Collector  Murphy  was  interfering  in  the 
matter,  he  telegraphed  him  at  Long  Branch.  Next  day,  having  had  a 
notice  from  him,  he  called  at  his  office  : 

Q.  Whereabouts  ? — A.  At  the  custom-house.  He  told  me  that  my  dispatch  had  been 
received  the  night  before,  while  he  was  at  the  President’s  cottage,  at  Loug  Branch,  and 
had  been  brought  to  him  there;  that  he  had  handed  the  dispatch  to  the  President,  who 
read  it,  and  the  President  then  asked  Mr.  Murphy  if  he  wanted  me  retained,  and  Mr. 
Murphy  told  me  that  he  had  told  him  that  he  had  better  let  the  matter  rest  as  it  was, 
or  rather,  that  he  would  give  orders  that  the  previous  order  for  my  removal  or  suspen¬ 
sion  be  revoked. 

Q.  Mr.  Murphy  told  you  that  your  dispatch  was  received  while  he  was  with  the 
President,  and  was  read;  the  President  asked  him  (Murphy)  if  he  wanted  you  re¬ 
tained  ?— A.  Yes. 

Q.  And  Mr.  Murphy  said  what? — A.  Murphy  said  the  matter  might  remain  in  the 
same  position  as  it  was  at  present ;  gave  no  positive  answer  one  way  or  the  other.  I 
stated,  previously,  that  I  had  been  informed  that  the  President  had  issued  an  order  for 
my  removal,  or  transfer,  and  the  President  told  Mr.  Murphy  on  this  evening  that  he 
would  have  the  previous  order  revoked. 

Q.  Before  or  after  Mr.  Murphy  told  him  he  had  better  let  it  stand  ? — A.  After. 

The  witness  gives  the  date  of  this  as  August  or  September,  1870. 
About  the  same  time,  iu  August  1870,  Collector  Murphy  was  impressing 
upon  General  Palmer,  the  appraiser,  the  personal  wishes  of  the  President 
in  regard  to  Corrigan,  the  laborer  in  the  appraiser’s  store.  This  last 
Mr.  Murphy  attempted  to  deny  after  a  manner,  though  not  at  all  suc¬ 
cessfully.  Mr.  Van  Cleft’s  testimony — not  questioned  by  Mr.  Murphy — 
is  in  general  accord  with  General  Palmer’s.  It  shows,  also,  which  is  in 
the  same  general  direction,  that  General  Dent  informed  the  witness  of 
General  Grant’s  u  particular  anxiety”  for  the  coalition  with  “the  young- 
democracy  of  New  York.” 

IN  SYMPATHY  WITH  THE  “TAMMANY  RING.” 

Mr.  Murphy  attempts  no  denial  of  the  fact  of  these  removals,  or  the 
many  others  of  like  character  mentioned  in  the  testimony.  He  under¬ 
takes  to  justify  his  action  by  the  insinuation  or  allegation  that  some  of 
the  parties,  so  removed,  were  in  a  greater  or  less  degree  in  sympathy 
with  wThat  was  known  as  the  “  Tammany  ring  ”  in  New  York. 

We  have  no  proof  to  satisfy  us  on  this  point,  and  the  ways  of  New 
York  City  politics  are  much  too  tangled  and  intricate  for  any  but  a  New 
York  .politician  to  tread  them. 

The  main  thing  proved  was,  that  the  leading  issue  from  time  to  time 
was  whether  the  republican  factions  should  by  indorsement  or  non-action 
at  the  elections  aid  that  wing  of  the  democratic  party  known  as  the 
“Young  Democracy,”  and  that  while  the  custom-house  faction  favored 
this  course,  their  opponents  favored  “  straight  ”  republican  nomina¬ 
tions. 

Such  allegations,  however,  of  sympathy  with  “  the  Tammany  ring,” 
whether  weighty  or  not,  sound  somewhat  oddly  in  the  mouth  of  Mr. 
Thomas  Murphy. 

His  own  testimony,  though  not  very  willingly  given,  shows  that  his 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXXIX 


own  relations,  personal  and  public,  with  the  “  Tammany  ring”  were  pe¬ 
culiarly  friendly,  not  to  say  intimate.  For  instance,  he  had  to  admit 
that  for  a  long  time  he  had  been  interested,  and  still  was  interested,  in 
a  large  operation  in  real  estate  in  the  city  of  New  York  with  William* 
M.  Tweed,  Peter  B.  Sweeney,  Kichard  B.  Connolly,  and  Hugh  Smith, 
who  may  be  supposed,  without  injustice,  to  constitute  in  their  own 
persons  the  u Tammany  ring”  of  New  York. 

By  Mr.  Bayard  : 

Q.  Did  you  consider  the  connection  with  William  M.  Tweed,  or  any  man  in  that  party, 
or  a  charge  against  a  man  that  he  had  been  connected  with  him,  a  sufficient  cause  to 
disrate  him  and  turn  him  out  of  office,  which  he  was  competent  otherwise  to  fill? — A. 
If  I  could  find  a  republican,  sir,  that  would  not  obey  the  orders  of  Tweed — if  there 
were  two  republicans,  one  of  whom  obeyed  Tweed’s  orders  and  the  other  would  not — 
I  should  certainly  give  the  office  to  the  one  who  would  not  obey  Tweed’s  orders. 

Q.  Were  not  your  own  relations  with  Tweed  of  an  exceedingly  intimate  and  confi¬ 
dential  nature? — A.  No,  sir,  they  were  not. 

Q.  Were  you  not  yourself  engaged  largely  in  real-estate  speculations  with  Tweed, 
Connolly,  and  Peter  B.  Sweeney,  and - A.  I  will  furnish  the  other  name — Smith. 

Q.  Who  else  ? — A.  That  is  all. 

Q.  Were  you  not  largely  engaged,  and  intimately,  with  them  in  large  and  important 
real-estate  speculations  ? — A.  No,  sir;  I  made  one  purchase  of  real  estate  in  which  I 
gave  Mr.  Hugh  Smith  an  interest;  I  made  a  purchase  of  two  blocks.  I  will  state 
that,  if  you  will  allow  me.  Shall  I  make  a  statement  in  regard  to  that  purchase  ? 

Q.  When  was  the  date  of  this  conveyance  ? — A.  This  was  two  years  ago  last  summer ; 
nearly  three  years  ago;  three  years  next  June,  I  think. 

By  Mr.  Casserly  : 

Q.  You  say  the  conveyance  was  three  years  ago  next  June  ? — A.  It  will  be  that ;  it 
was  two  years  ago  last  summer ;  I  cannot  give  the  month  exactly. 

By  Mr.  Bayard  : 

Q.  Do  you  remember  what  wras  the  consideration  of  that  conveyance  ? — A.  The 
whole  purchase  was  $542,500. 

Q.  I  suppose,  in  New  York,  that  was  considered  a  very  large  operation? — A.  Well, 
I  considered  it  so,  sir.  If  it  had  not  been  large  I  would  have  carried  it  all  myself. 

Q.  When  did  that  partnership  of  yours  with  Tweed,  Sweeney,  and  Connolly  in  the 
“ real  estate”  cease? — A.  That  partnership  has  not  ceased;  we  are  still  owners  of 
that  property,  for  I  never  could  get  it  to  cease. 

Mr.  Murphy  was  subsequently  questioned  as  to  the  cause  of  the  re¬ 
movals  growing  out  of  the  controversy  iu  the  party,  already  referred  to. 

By  Mr.  Casserly  : 

Q.  Was  not  the  question  involved  in  that  controversy  whether  the  republicans  should 
run  a  straight  municipal  ticket  of  their  own  or  not  ? — A.  The  question  involved  iu 
that - 

Q.  Was  it  oi;  not,  Mr.  Murphy? — A.  That  was  not  entirely  the  question,  sir.  That 
was  partly  the  question  involved. 

Q.  Well,  go  on  and  add  anything  else  you  wish. — A.  The  question  involved  was 
whether  the  republican  parties  should  run  themselves,  or  whether  Tweed  should  run 
them.  That  was  the  principal  question  involved. 

Q.  It  was  a  question,  then,  of  fidelity  to  the  republican  party  ? — A.  Yes,  sir;  on  our 
side  it  was. 

Q.  And  you  considered  that  any  man  who  had  relations  with  Tweed,  or  any  others  of 
the  Tammauy  ring,  was  not  fit  to  stay  in  office,  and  could  not  be  regarded  as  faithful 
to  the  republican  party  ? — A.  Tho  practice  then - 

Q.  Is  that  correct  ? — A.  My  theory  is,  sir,  that  a  man  has  a  right  to  be  a  democrat  if 
he  so  professes  himself;  but  a  man  professing  to  be  a  republican,  and  then  doing  demo¬ 
cratic  work,  I  do  not  think - 

By  Mr.  Bayard  : 

Q.  Then  what  ? — A.  Then  doing  work  for  the  democratic  party,  is  not  such  a  man 
as  1  believe  iu.  An  outspoken  and  honorable  foe  I  can  respect,  but  a  sneak  or  a  traitor 
I  despise. 

By  Mr.  Casserly: 

I  will  ask  the  reporter  to  repeat  my  question. 

[The  question  was  repeated  to  the  witness  as  follows  :] 

Q.  And  you  considered  that  any  man  who  had  relations  with  Tweed,  or  any  others 


cxxx 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


of  the  Tammany  ring,  was  not  fit  to  stay  in  office,  and  could  not  be  regarded  as  faith¬ 
ful  to  the  republican  party  ? 

The  Witness.  Any  man  who  professed  to  be  a  republican,  and  obey  Tweed’s  orders 
politically,  I  did  not  think  fit  to  be  in  office. 

Q.  Will  you  give  me  an  answer  to  my  question,  yes  or  no  ? 

[The  question  was  here  read  again  to  the  witness.] 

The  Witness.  The  question  is  not - 

By  Mr.  Bayard  : 

Q.  What  is  your  answer? — A.  I  cannot  answer  that  question  direct.  Yes  or  no  I  do 
not  think  would  come  in  as  a  proper  answer. 

By  Mr.  Casserly  : 

Q.  I  repeat  the  question. 

[The  question  was  here  again  read  to  the  witness.] 

The  Witness.  I  say  yes,  if  he  was  a  republican,  he  was  not  fit. 

By  Mr.  Casserly  : 

Q.  Mr.  Murphy,  how  long  have  you  known  Mr.  Tweed,  or  Mr.  Sweeney,  or  Mr.  Con¬ 
nolly? — A.  I  have  known  them  quite  a  number  of  years. 

Q.  State  the  number  as  nearly  as  you  can. — A.  I  have  known  Tweed  and  Connolly 
probably  for  fifteen  years.  I  wish  to  be  understood  in  my  answer,  that  if  a  man  was  a 
democrat  he  had  a  right  to  be  with  Tweed,  and  if  he  was  a  republican  he  had  no  right 
to  be,  politically. 

Q.  Which  of  those  three  men  have  you  known  the  longest — Tweed,  Sweeney,  or 
Connolly? — A.  My  impression  is  that  I  have  known  Tweed  the  longest — about  the 
same  time.  They  lived  in  the  same  ward  that  I  did,  I  think,  along  in  1857  and  1858. 

*  *  *  *  *  *  n  * 

Q.  Was  the  transaction  in  real  estate,  of  which  you  spoke  yesterday,  the  only  real 
estate  transaction  you  ever  had  with  Tweed,  Sweeney,  Connoliy,  or  any  of  them? — A. 
It  was,  sir. 

Q.  You  stated,  if  I  remember  rightly,  that  the  date  of  it  was  three  years  ago  this 
June. — A.  I  would  not  say  June.  It  may  have  been  July,  August,  or  September  of 
that  year.  -  i 

Q.  Was  not  the  date  of  that  conveyance  October  15,  1889? — A.  I  said  it  was  in  the 
summer  or  early  part  of  that  fall.  It  might  have  been,  sir. 

Q.  What  did  you  say  was  the  amount  paid  for  the  purchase? — A.  I  remember  the 
amount  distinctly.  The  amount  paid  for  the  two  blocks  was  $542,500. 

Q.  Are  you  quite  sure  of  that  ? — A.  Yes,  sir. 

Q.  Was  the  correct  amount  expressed  in  the  deed? — A.  It  was, sir. 

Q.  You  are  quite  sure  of  that? — A.  Yes,  sir.  Well, let  me  see —yes,  there  is  some 
doubt  about  that.  The  entire  amount  paid,  I  guess,  was  not  expressed  in  the  deed. 

Q.  That  was  a  regular  purchase  on  your  part,  and  a  sale  by  Mr.  Lennox,  was  it  not  ? — 
A.  Yes,  sir. 

Q.  And  at  that  time  such  a  transaction  as  that  was  required  to  be  stamped,  did  it 
not  ? — A.  Yes,  sir. 

Q,  With  a  certain  number  of  stamps,  in  proportion  to  the  sum  paid  in  the  purchase  ? 

I  think  you  stated  your  interest  was  one-half,  and  the  other  half  was  divided  ? — A.  My 
interest  was  one-fifth.  I  stated  that  I  originally  agreed  to  give  Mr.  Hughey  E.  Smith 
one-half,  but  that  he  afterwards  got  me  to  give  Tweed,  Sweeney,  and  Connolly  an  in¬ 
terest.  That  was  what  I  meant  to  be  understood  as  stating. 

Q.  That  made  five  of  you  who  were  interested  in  the  purchase — one-fifth  each? — A. 
Yes,  sir. 

Q.  Those  lots  were  quite  near  to  Central  Park,  were  they  not  ? — A.  Yes,  sir. 

Q.  How  near  ? — A.  About  a  block  and  a  half.  About  600  feet  I  should  say,  or  700. 

******** 

Q.  When  did  you  become  one  of  the  commissioners  on  the  widening  of  Broadway? — 
A.  I  think  it  was  year  before  last. 

Q.  That  was  a  measure  of  the  Tammany  people,  was  it  not? — A.  Yes,  sir. 

Q.  Which  they  carried  through  the  legislature  ? — A.  Yes,  sir. 

Q.  The  board  was  invested  with  very  large  powers,  was  it  not,  in  regard  to  the 
appraisement  of  damages,  and  so  on  ? — A.  Yes,  sir. 

Q.  The  transaction,  if  carried  out,  would  have  been  a  very  large  one  in  its  dimen¬ 
sions? — A.  Very  large,  sir;  $3,000,000,  I  believe,  or  $2,900,000,  when  I  left  it. 

Q.  That  was  an  estimate  of  the  damages  and  expenses?— A.  Yes,  sir. 

Q.  Do  you  remember  when  the  new  school-board  was  created? — A.  I  recollect  when 
it  was  created. 

Q.  That  was  a  measure  of  the  Tammany  ring,  was  it  not? — A.  Yes,  sir;  the  senate, 
though,  I  think,  at  the  time  that  passed,  was  republican. 

Q.  Still  it  was  a  measure  of  the  Tammany  ring? — A.  They  favored  it,  sir. 

Q.  Pushed  it  forward  and  carried  it  through? — A.  Yes,  sir. 

Q.  The  assembly  was  democratic,  was  it  not? — A.  It  was,  I  think,  democratic. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXXXI 


Q.  Were  you  appointed  a  member  of  the  school-board  ? — A.  Yes,  sir. 

Q.  When? — A.  That  must  have  bden  in  1868  or  1869;  I  have  forgotten  which;  1869, 
I  think  it  was. 

Q.  That  board  had  the  entire  control  of  the  important  and  extensive  subject  of  the 
common-school  system  of  the  city  of  New  York,  had  it  not  ? — A.  Yes  sir. 

Q.  All  the  appointments,  purchases,  expenditures,  &c.  ? — A.  Yes  sir. 

Q.  Were  you  holding  those  two  positions,  as  commissioner  on  the  widening  of  Broad¬ 
way  and  member  of  the  school-board,  when  you  were  appointed  collector  ? — A.  Yes, 
sir.  s 

Q.  How  long  after  your  appointment  before  you  resigned  them  ? — A.  But  a  short 
time,  sir.  I  cannot  say  exactly;  two  or  three  months. 

Q.  Who  was  the  counsel  of  the  tax  commissioners  when  you  were  appointed  collec¬ 
tor  ? — A.  General  Arthur. 

Q.  The  present  collector  ? — A.  Yes,  sir. 

Q.  Was  the  tax  commission  disturbed  in  any  way  by  the  Tammany  ring  when  they 
had  power  in  the  legislature  ? — A.  Yes,  sir. 

Q.  Was  it  repealed  ? — A.  No,  sir. 

Q.  Or  modified? — A.  There  were  four  commissioners  originally;  they  added  a  fifth. 

Q.  Did  that  give  them  control  of  the  board? — A.  Yes,  sir. 

Q.  When  was  that  ? — A.  That  was  a  year  ago  last  winter.  It  may  have  been  the 
year  before  that. 

Q.  It  was  in  1870  or  1871 ;  1871  I  think  it  must  have  been. — A.  I  think  it  was  two 
years  ago. 

Q.  Was  it  by  the  new  board  that  General  Arthur  was  appointed  ? — A.  No,  sir ;  I  do 
not  know  that  the  fifth  commissioner  was  ever  appointed. 

Q.  Did  the  new  board  remove  General  Arthur,  or  retain  him  in  office  ? — A.  He  re¬ 
signed. 

Q.  When  ;  before  the  new  board  took  office  ?— A.  No,  sir. 

Q.  How  long  did  he  continue  in  office  under  the  new  board? — A.  I  don’t  recol¬ 
lect  now.  He  remained  in  office  until  that  time  that  the  discussions  occurred  in 
the  general  committee,  when  the  point  was  raised  of  holding  position  un<].er  Tam¬ 
many  Hall. 

Q.  Then  he  remained  in  office  some  time  under  the  new  board? — A.  Three  months, I 
think. 

Q.  And  when  the  discussion  arose  as  to  the  republicans  holding  offices  under  Tam¬ 
many  Hall  he  withdrew  ? — A.  Yes,  sir. 

Q.  What  was  the  salary  of  that  office  ? — A.  I  think  it  was  $10,000  a  year. 

Q.  I  mean  the  office  of  counsel  of  the  tax  commissioners  ? — A.  My  recollection  is  it 
was  $10,000  a  year. 

The  next  day,  (volume  3,  pages  429,  &c.,)  being  re-examined  to  cor¬ 
rect  his  previous  testimony,  he  testified  on  the  same  subject : 

By  Mr.  Casserly  ; 

******  * 

Q.  Were  you  one  of  those  who  recommended  the  appointment  of  General  Arthur  as 
collector  of  the  port  of  New  York  ? — A.  I  believe  I  was,  sir. 

Q.  How  long  had  you  known  him  at  that  time? — A.  General  Arthur? 

Q.  Yes. — A.  I  have  known  General  Arthur  for  ten  or  twelve  years. 

Q.  What  were  your  relations  with  him? — A.  Very  close  and  very  intimate,  sir. 

Q.  Did  you  first  suggest  his  name  yourself? — A.  I  was  one  of  the  first,  sir. 

Q.  Did  you  exert  yourself  to  obtain  favor  for  him  with  the  appointing  power  ? — A.  I 
did,  sir,  in  company  with  others. 

Q.  As  collector  going  out,  standing  well  with  the  administration,  of  course  your 
wishes  were  entitled  to  some  weight  ? — A.  Yes,  sir. 

Q.  Do  those  very  intimate  and  friendly  relations  with  General  Arthur  continue  on 
your  part  ? — A.  They  do,  sir. 

The  declared  object  of  the  witness  in  presenting  himself  for  further 
examination  was  that  he  wished  to  make  corrections  of  his  testimony. 
One  correction  was  stated  by  himself  as  follows: 

Then,  yesterday,  Mr.  Casserly  asked  me  a  question  which  I  supposed  meant — the  re¬ 
lation  referred  to  by  him  meant  political ;  whether  a  republican  holding  relations  with 
Mr.  Tweed  was  a  fit  person  to  hold  office.  I  meant  to  be  understood  in  my  answer  to 
say  political  relation.  I  wish  that  to  be  the  answer.  Of  course  I  did  not  mean  per¬ 
sonal  or  business  relations. 

By  Mr.  Casserly  : 

Q.  Have' you  mentioned  who  your  colleagues  were  on  the  board  of  commissioners  for 
the  widening  of  Broadway  ? — A.  I  have  not,  sir. 


CXXXII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Q.  Wlio  were  they? — A.  One  was  Mr.  Hennessey,  I  have  not  got  his  first  name,  and 
the  other  was  Mr.  Cornell ;  two  democrats. 

Q.  What  was  Mr.  Cornell’s  given  name  ? — A.  Charles  G. 

Q.  What  was  Mr.  Hennessey’s  given  name  ? — A.  That  I  couldn’t  tell  yon. 

Q.  They  were  both  adherents  of  the  Tammany  ring,  were  they  not? — A.  They  were 
both  Tammany  men. 

Q.  Adherents  of  Tweed  and  his  associates? — A.  Yes, sir. 

Q.  You  desire  this  morning  to  correct  your  testimony  in  regard  to  persons  holding 
relations  yith  the  Tammany  ring;  and  I  understand  the  extent  of  your  correction  is 
that  you  wish  your  answer  to  be  considered  as  though  you  referred  to  and  spoke  of 
persons  having  political  relations  with  the  Tammany  ring  ? — A.  That  was  my  refer¬ 
ence,  entirely,  sir.  I  did  not  refer  to  relations  personal,  or  in  business  matters. 

Q.  You  do  not  mean  to  say,  now,  that  you  used  any  such  language  yesterday,  do 
you  ?■ — A.  How  is  that,  sir? 

Q.  Do  you  mean  to  say  that  you  did  use  the  qualification,  political  relations  ? — A.  I 
had  supposed  that  I  had  used  it,  and  I  sux>posed  I  referred  all  the  while,  in  talking  of 
Tweed,  to  him  politically. 

Q.  Do  you  remember  how  many  times  that  question  was  repeated  to  you  in  terms? — 
A.  No,  I  do  not.  I  know  it  was  repeated  xeiT  often,  that  and  a  great  many  other 
questions.  In  fact,  I  had  got  tired  out  with  the  questions  that  were  asked. 

Q.  That  I  can  very  well  understand. — A.  I  did  not  think  some  of  them  amounted  to 
a  great  deal. 

Q.  Well,  opinions  may  dilfer  about  that.  If  you  had  answered  the  questions  'with 
directness  it  never  would  have  been  necessary  to  repeat  one  of  them. — A.  Do  you  mean 
yesterday  ? 

Q.  Yesterday. — A.  Well,  at  the  time  I  will  admit  that  probably  I  did  not  understand 
the  question  thoroughly.  Having  used  the  word  “  republican  ”  1  supposed  that  you  re¬ 
ferred  to  political  relations  entirely,  and  nothing  else,  and  I  labored  under  the  impres¬ 
sion  that  the  word  “ political  ’’.was  used  in  the  answer — in  the  question,  I  mean. 

Q.  You  are  aware,  now,  that  it  was  not  in  the  question  ? — A.  Yes,  sir. 

Q.  You  say,  though  it  was  repeated  to  you  over  and  over  so  many  times,  that  you 
misunderstood  it  all  the  time? — A.  I  still  labored  under  the  impression  that  you 
referred  to  a  republican  having  political  relations  with  Tweed. 

Q.  And  that  you  did  not  refer  to  republicans  having  business  or  personal  relations 
with  Tweed  and  his  associates  ? — A.  Of  course  not.  If  I  did  I  should  say  that  Mr. 
Greeley  was  not  fit  to  hold  office. 

Q.  Do  not  let  us  go  off'  on  that.  If  you  want  to  make  any  statement  in  regard  to 
Mr.  Greeley,  and  the  committee  are  willing  to  hear  you,  I  certainly  shall  not  object. 
What  kind  of  relations  did  you  consider  you  had  with  the  Tammany  ring  when  you 
were  a  member  of  this  Broadway  commission,  sitting  there  with  two  adherents  of  the 
ling  and  under  the  favor  of  the  ring? — A.  The  custom  had  been  in  the  appointing  of 
those  commissions  to  put  one  republican  and  two  democrats.  I  have  known  of  Judge 
Davies  being  on  one  of  those  commissions  with  two  democrats. 

******* 

Q.  I  will  ask  the  reporter  to  read  to  the  witness  again  my  question  as  to  his  own 
relations  with  the  Tammany  ring  while  he  was  a  member  of  the  Broadway  commis¬ 
sion. 

The  question  was  read,  as  follows :  “  What  kind  of  relations  did  you  consider  you  had 
with  the  Tammany  ring  when  you  were  a  member  of  this  Broadway  commission, 
sitting  there  with  two  adherents  of  the  ring,  and  under  the  favor  of  the  ring?” 

A.  My  relations  with  Mr.  Smith,  my  family  relations  with  Mr.  Smith,  were  always 
pleasant  and  always  agreeable.  I  never  had  but  very  slight  acquaintance  with  either 
of  the  other  people,  either  socially  or  in  business  matters.  In  fact,  Tweed  was  never 
in  my  house  and  I  never  in  his. 

Q.  Is  that  your  answer  ? — A.  That  is  my  answer.  My  relations  with  Mr.  Smith  were 
social  and  personal,  and  through  him  I  got  on  that  commission. 

Q.  How  many  years. did  you  say  yesterday  you  had  known  Tweed  well  ? — A.  I  had 
known  him  seventeen  years,  I  think.  I  knew  him  in  the  Seventh  ward,  and  I  knew 
him  afterward  when  he  moved  up  on  Murray  Hill.  I  knew’  him  during  all  the  inter¬ 
mediate  time,  as  all  the  rest  of  New  York  did. 

Q.  How  long  after  the  purchase  of  the  large  body  of  real  estate,  by  you  and  the 
members  of  the  Tammany  ring,  did  you  become  a  member  of  the  Broadway  commis¬ 
sion? — A.  I  think  it  was  a  short  time  after  that  that  Smith  asked  me  to  go  on  that 
commission.  I  am  not  positive. 

HOW  TO  CARRY  A  PRIMARY  ELECTION. 


Mr.  Murphy’s  views  of  political  morals  may  be  fairly  estimated  by 
his  own  account  of  a  transaction  with  one  John  Bennett,  a  keeper  of  a 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXXXIII 


drinking-saloon,  and  a  professional  ward  politician  in  the  eleventh 
assembly  district  of  New  York. 

The  object  of  Mr.  Murphy  was  to  defeat  Mr.  Horace  Greeley  as  a  dele¬ 
gate  to  the  State  convention  ;  so  Mr.  Murphy,  through  the  agency  of  his 
intimate  friend  Mr.  George  Bliss,  jr.,  concocted  a  plan  by  which  Mr. 
Greeley,  through  Bennett’s  agency,  was  to  be  cheated  out  of  his  election 
by  the  fraudulent  use  of  pretended  republican  voters. 

The  transaction  was  a  simple  one,  begun  and  ended  by  the  payment 
of  several  hundred  dollars  of  Mr.  Murphy’s  money  in  exchange  for  Mr. 
John  Bennett’s  fraudulent  voters. 

Mr.  George  Bliss,  jr.,  according  to  his  own  testimony,  (at  page  450  of 
volume  3,)  entered  upon  the  transaction  with  the  ready  cheerfulness  of  a 
man  who  feels  himself  fitted  to  his  work,  and  to  whom  it  was  also  u  a 
labor  of  love.”  His  view  of  the  transaction  is  so  characteristic  that  it 
is  here  inserted  in  his  own  language: 

By  Mr.  Bayard  : 

Q.  Your  estimate  of  Bennett’s  character  was  not  very  high  or  respectful,  was  it,  Mr. 
Bliss  ? — A.  I  thought  John  Bennett  was  a  man  who  would  keep  his  promise  if  he  made 
a  promise. 

Q.  Did  you  look  upon  him  as  being  an  honorable  man? — A.  I  looked  upon  him  as 
being — yes,  sir,  as  being  an  honorable  man. 

Q.  Do  you  now  ? — A.  No,  sir,  I  do  not  know  that  I  do  to  the  same  extent. 

Q.  But  you  did  then  ? — A.  If  you  wish  to  know  why  I  dQ  not,  I  will  tell  you. 

Q.  Well,  I  willlask  you  that  directly. — A.  I  did  look  upon  him  as  being  an  honorable 
man.  I  did  not  look  upon  him  as  a  minister  of  the  gospel  by  any  means. 

Q.  Did  you  feel  when  you  were  dealing  with  Mr.  Bennett  that  you  were  dealing  with 
a  man  entitled  to  your  respect  and  confidence  ? — A.  I  did,  sir. 

Q.  You  felt  toward  him  as  your  political  equal? — A.  Yes,  sir. 

Q.  I  do  not  use  the  word,  socially  your  equal,  but  I  mean  did  you  feel  that  he  was 
upon  a  level  with  you  on  the  score  of  morality  and  good  conduct  at  the  time  you  first 
met  him  ? — A.  It  was  not  my  business  to  put  myself  up  above  him.  I  felt  that  he  was, 
on  the  score  of  the  average  republican  politician  of  the  city  of  New  York,  about  on 
that  level,  and  on  a  higher  level  than  some  of  them,  because  I  felt  that  he  was  a  man 
who  would  keep  his  word,  and  I  know  some  of  them  would  not.  It  is  right  to  say  that 
I  did  tbink  that  perhaps  Bennett  would  do  some  things  I  would  not  do.  I  remember  I 
had  one  idea  pass  through  my  mind  on  that  subject. 

*  #  *  if  *  if 

Q.  How  did  he  tell  you  it  was  made  up;  by  his  knowledge? — A.  He  said  it  was  the 
roll  made  at  the  enrollment  of  their  organization,  which  took  place  a  few  months  pre¬ 
vious. 

Q.  Did  you  not  also  say  that  the  enrollment  vjas — that  he  had  furnished  the  names  to 
those  parties  to  make  it  up  on? — A.  What  I  said  was,  he  stated  to  me  that  they,  the 
enrolling  committee,  came  and  sat  there,  I  think,  two  nights,  and  then  did  not  get  any 
men  of  any  consequence  to  come  and  enroll ;  that  then  somebody  came  to  him  and 
made  it  square  with  him.  I11  other  words,  he  had  been  a  little  cross  about  it  or  some¬ 
thing,  and  that  he  then  told  these  men  whom  he  influenced — the  expression,  I  think, 
was  “controlled” — he  told  these  men  to  go  and  enroll,  and  they  went  and  enrolled  in 
the  organization. 

Q.  Were  those  men  from  what  you  call  the  Bradley  association  ? — A.  He  told  me  that 
he  got  a  large  portion  of  them  from  the  Bradley  association. 

Q.  Is  that  a  democratic  association ? — A.  Yes,  sir;  it  is  a  democratic  association.  I 
asked  him  if  they  were  democrats,  and  he  rather  fenced  with  me  on  tluft.  He  said  they 
voted  the  republican  ticket  when  he  told  theni  to.  Then  I  asked  him  if  they  were 
democrats  or  republicans,  and  he  said  he  got  them  out  of  the  John  Bradley  association. 
I  then  asked  him  if  the  names  he  proposed  to  use,  the  persons  he  proposed  to  have  vote, 
were  the  members  of  the  association,  and  he  said  they  were. 

****** 

COLLECTOR  MURPHY  AMUSES  HIMSELF. 

Mr.  Bliss’s  statement  is  fully  corroborated  by  Mr.  Murphy  himself, 
(volume  3,  pages  3G3,  364.)  The  latter  says  : 

Q.  Have  you  employed  any  money,  used  any  money,  in  your  political  contests  in 
New  York? — A.  There  is  one  case,  sir,  where  1  employed  a  little  money,  but  it  was  not 


CXXXIY 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


really  in  a  political  contest,  for  there  was  no  contest.  There  is  an  organization  in  the 
Eleventh  assembly  district  called  the  Gridley  organization,  which,  to  a  great  extent — 
I  believe  it  has  been  proved  so  before  their  own  committee — was  composed  of  demo¬ 
crats.  There  was  one  man  in  the  organization  who,  I  understood,  was  a  prominent 
man  there,  of  the  name  of  Bennett,  who  at  that  time  did  not  entirely  agree  with  Grid- 
ley  and  company. 

By  Mr.  Bayard  : 

Q.  What  was  your  comment  about  Bennett  ? — A.  He  did  not  entirely,  at  the  time  of, 
this  primary — Gridley’s  primary,  not  ours — did  not  entirely  agree.  My  information . 
was  that  he  did  not  entirely  agree  with  Gridley  at  that  time,  and  would  just  as  soon 
run  a  ticket  in  opposition  ;  and  a  friend  of  mine  came  and  said  if  I  wanted  a  little 
amusement  with  Horace  Greeley  I  had  an  opportunity,  and  I  wanted  to  know  how. 
He  said,  They  are  going  to  run  him  a  delegate  for  the  State  convention  in  the  Grid- 
ley  organization.”  *  *  *  “  Mr.  Bennett,”  said  he,  “  would  require  a  little 

money  to  do  that.”  I  asked  this  friend  of  mine  “  How  much  ;”  he  said  a  couple  of  hun¬ 
dred  dollars,  I  think.  Says  I,  “  I  do  not  know  of  any  better  way  I  could  amuse  myself 
with  Mr.  Greeley  than  in  that  way,  and  I  will  furnish  the  $200  and  give  those  men  their 
supper.”  But  I  think  the  $200  wan  not  sufficient,  and  he  came  back  for  $200  more,  and  I 
gave  that. 

Q.  How  much  more  did  you  give? — A.  I  think  it  was  $200  more. 

*■  *  *■  *  *  * 

By  Mr.  Howe  : 

Q.  Your  investment,  then,  was  simply  to  aid  a  rival  of  Mr.  Greeley  in  defeating  him 
in  his  own  organization? — A.  In  his  own  organization. 

Q.  In  the  organization  to  which  he  had  attached  himself  ? — A.  Yes,  sir. 

By  Mr.  Casserly  : 

Q.  Have  you  mentioned  the  name  of  that  rival  ? — A.  Mr.  Bennett. 

Q.  I  ask  you  that,  because  I  do  not  quite  understand  the  state  of  your  evidence,  as 
is  implied  in  Senator  Howe’s  last  question,  that  your  object  was  to  aid  the  rival  of  Mr. 
Greeley  to  beat  him  in  his  own  organization. — A.  Mr.  Bennett  and  his  friends  were  the 
rivals,  you  know. 

By  Mr.  Bayard  : 

Q.  Bennett  was  the  rival  of  Greeley  ? — A.  Yes,  sir. 

Q.  And  you  preferred  Bennett  to  Greeley  in  this  matter  ? — A.  I  had  no  particular 
interest  in  Bennett. 

Q.  And  you  gave  him  money  to  defeat  Greeley  ? — A.  Yes,  sir.  I  did  not  know  Ben¬ 
nett  personally  ;  I  had  seen  him  once. 

Here  we  leave  the  trio,  Murphy,  Bliss,  and  John  Bennett,  in  their 
little  game  to  send  the  u  honorable ”  Mr.  Bennett  as  delegate  to  a  State 
convention  instead  of  plain  Horace  Greeley. 

MR.  MURPHY’S  KNOWLEDGE  OF  THE  DUTIES  OF  COLLECTOR. 

Mr.  Murphy’s  knowledge  of  his  duties  as  collector  was  in  an  inverse 
ratio  to  his  intimacy  with  the  lowest  ward-politics  of  New  York. 

His  fitness,  in  point  of  knowledge,  for  the  great  place  of  collector  of 
customs  at  New  York — not  second  in  importance  to  some  of  the  Execu¬ 
tive  Departments  at  Washington — may  be  imagined  from  the  following 
extracts  from  his  own  testimony,  (volume  3,  page  367,  &c. :) 

ABATEMENT  OF  DUTIES  ON  GOODS  STOLEN. 

By  Mr.  Pratt  : 

Q.  Yes;  in  any  case  where  it  can  be  made  satisfactorily  to  appear  that  the  cases  of 
goods  have  been  plundered  since  they  came  into  the  control  of  the  custom-house 
officers,  I  wish  to  learn  whether,  on  application,  there  is  abatement  of  duties  or  not  ? — 
A.  Well,  I  think  there  is  a  discretionary  power  with  the  Secretary  of  the  Treasury  in 
such  cases.  That  is  a  law  question.  If  that  question  was  asked  me  in  the  custom¬ 
house  I  would  immediately  send  for  Mr.  Clinch  and  Mr.  Clark,  and  I  would  act  accord¬ 
ing  to  their  judgment. 

BOND  OF  A  WAREHOUSEMAN — THE  FOllTY-EIGHT  HOUR  RULE. 

By  Mr.  Bayard  : 

Q.  Can  you  tell  this  committee  now  what  is  the  condition  of  the  bond  given  by  a 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXXXV 


general-order  warehouseman  ? — A.  I  do  not  know  that  I  ever  took  one  of  those  bonds 
and  read  it  through. 

******* 

Q.  Have  you  ever  traced  the  law  while  you  were  collector ;  the  history  of  the  law, 
giving  so  many  days  after  the  arrival  of  the  vessel  for  the  merchant  to  obtain  his  per¬ 
mits  ? — A.  My  information  on  these  subjects  is  always  from  my  subordinates,  and  they 
have  stated  to  me  what  the  law  was,  and  probably  read  the  law  to  me. 

Q.  Did  you  ever  read  the  law  on  these  subjects  yourself? — A.  I  do  not  know  that  I 
ever  did,  sir,  specially. 

Q.  Do  you  know,  £hen,  whether  there  is,  by  law,  any  period  given  to  the  merchant 
to  present  his  permit  to  the  inspector  and  take  his  goods  away  before  they  are  liable 
to  be  sent  to  the  general  order  ? — A.  My  understanding  of  the  Jaw  is  that  there  is 
none. 

Q.  Is  none? — A.  No  time  given. 

Q.  What,  then,  is  the  origin  of  the  forty-eight  hour  rule? — A.  I  am  not  positive,  sir, 
whether  it  is  by  law  or  regulation  ;  my  only  knowledge  of  it  was  obtained  in  a  long 
discussion  I  had  with  my  subordinates  with  regard  to  night  permits. 

Then  the  witness  referred  to  a  controversy  on  the  forty-eight  hour 
rule  in  1861 : 

Q.  In  1861  ? — A.  Yes,  sir ;  when  Mr.  Chase  was  Secretary  of  the  Treasury  ;  whether 
it  was  a  law  or  regulation  of  the  Treasury,  I  cannot  say  positively  which  ;  but  in  the 
law  or  in  the  regulation  the  language  is  used — “one  whole  day  exclusive  of  the  day 
of  entry  of  the  vessel.”  There  was  a  dispute  on  that  point  between  the  shippers  and 
the  importers,  and  it  was  finally  submitted  to  the  Secretary  of  the  Treasury.  He 
decided  that  that  meant  forty-eight  hours.  I  remember  it  distinctly,  reading  that 
paper. 

******* 

Q.  What  act  of  Congress  was  that  ? — A.  That  I  cannot  say. 

Q.  You  never  read  the  act? — A.  Well,  I  have  had  them  stated  to  me,  in  discussing 

that  poiut,  by  Mr.  Clinch  and  Mr.  Clark. 

*  *.  *  #  *  *  * 


THE  WAREHOUSING  SYSTEM. 


By  Mr.  Bayard: 

Q.  Do  you  know  the  history  of  the  warehousing  law,  Mr.  Murphy,  and  do  you  know 
when  the  warehousing  system  was  adopted? — A.  The  bonded  warehouse? 

Q.  Yes,  sir. — A';  Well,  no,  sir  ;  not  specially  ;  not  so  as  to  state  familiarly. 

Q.  And  you  are  not  familiar  with  its  history  ? — A.  No,  sir. 

Q.  Who  has  control,  and  under  whose  direction  and  regulation  are  private  ware¬ 
houses  permitted  to  become  bonded  warehouses? — A.  By  the  collector  of  the  port  and 
the  concurrence  of  the  Secretary  of  the  Treasury. 

Q.  Does  not  the  law  place  the  whole  of  that  under  the  control  of  the  Secretary  of 
the  Treasury  ? — A.  That  is  not  my  understanding  of  it,  sir. 

Q.  Are  you  not  aware  that  the  law  requires  that  private  warehouses  which  are 
sought  to  be  used  for  the  purpose  of  storing  warehouse  goods  shall  be  approved  by  the 
Secretary  of  the  Treasury  ? — A.  Yes,  sir ;  that  is  my  understanding  of  that  in  regard 
to  private  warehouses. 

Q.  Are  you  not  aware  that  the  whole  warehousing  system,  completely  and  specific¬ 
ally,  and  expressly  by  law,  is  placed  under  the  charge  of  the  Secretary  of  the  Treas¬ 
ury  ? — A.  I  am  not,  sir. 

Q.  I  understand  this  warehouse  business  ^nd  general-order  business  were  a  good  deal 
discussed  in  your  time  ? — A.  Yes,  sir. 

Q.  Well,  during  that  time  was  not  the  question  of  the  power  of  the  Secretary  of  the 
Treasury  to  regulate  the  whole  of  this  subject  considered  by  you  ? — A.  Yes,  sir. 

Q.  Did  you  read  the  laws  upon  that  subject  ? — A.  No,  sir. 

Q.  You  never  did  ? — A.  In  questions  of  that  kind,  when  they  always  came  up,  I  sent 
for  Mr.  Clinch  and  Mr.  Clark ;  they  were  the  law  officers  of  the  custom-house. 

ABOUT  THE  WEIGHERS. 


By  Mr.  Casserly  : 

Q.  Do  you  know  what  duties  a  weigher  in  the  custom-house  performs,  and  can  you 
tell  us?  I  mean  the  weigher  himself  now;  I  am  uot  speaking  of  his  assistants.— A. 
The  duties  of  the  weighers,  I  suppose,  are  to  have  charge  of  the  goods  and  see  the 
proper  weights  of  all  goods  that  come  in  there  dutiable  are  returned  to  the  custom¬ 
house. 

Q.  Do  you  know  whether  the  officer  known  as  the  weigher  does  personally  take  the 


CXXXVI 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


weights,  see  to  the  weights,  weigh  the  goods,  or  have  any  personal  knowledge  of  the 
practical  ascertainment  of  the  weight  of  merchandise? — A.  There  are  officers  who 
always  come  and  report,  sir.  I  suppose  they  are  the  ones  who  perform  the  duty. 
Never  having  been  on  the  dock,  you  can  get  that  information  much  better  from  the 
weighers. 

ERRORS  IN  THE  COLLECTOR’S  OFFICE  OF  A  MILLION  OF  DOLLARS  IN  THE 

CUSTOM  DUTIES. 

Q.  Were  you  aware  of  the  discrepancies  which  have  been  testified  to  here  between 
the  collector’s  office  and  the  naval  office  ? — A.  What  discrepancies  ? 

Q.  Were  you  aware  of  any  discrepancies? — A.  I  do  nftt  know  what  discrepancies  you 
refer  to. 

Q.  I  will  put  the  question  this  way:  Were  you  aware  during  the  time  you  were  col¬ 
lector  that  large  discrepancies,  differences  in  calculations  of  amounts  of  duty  to  a  very 
large  amount,  were  frequently  found  between  the  calculations  of  the  collector’s  office 
and  of  the  naval  office? — A.  I  do  not  recollect  of  any  very  large  amount,  sir,  that  oc¬ 
curred.  There  may  have  been  errors  in  the  summing  up  of  figures,  which  "were  after¬ 
ward  adjusted. 

Q.  Were  you  aware  of  any  such  discrepancy  as  would  amount  to  a  million  of  dollars 
in  a  period  of  eight  months  between  the  calculations  of  the  collector’s  office  and  the 
naval  office? — A.  I  should  have  to  refer  back  to  the  books  of  the  custom-house  to  get 
the  information  on  that  subject. 

Q.  Have  you  any  recollection  of  any  such  discrepancies  during  your  term  of  office  ? — 
A.  I  have  not,  at  present. 

M  *  *  *  *  *  *  * 

HOW  DUTIES  ARE  LIQUIDATED. 

Q.  Can  you  give  us  a  description  of  the  method  by  which  duties  are  liquidated — the 
process? — A.  Well,  that  is  a  very  long  matter,  and  I  think  I  would  have  to  take  you 
to  the  custom-house  and  show  you  the  papers  and  go  through  with  you  to  explain  it. 

Q.  Can  you  tell  us  the  method  by  which  duties  are  liquidated  in  the  custom-house? — 
A.  I  would  not  attempt  to  do  that.  I  understand  how  it  is,  but  I  don’t  think  I  can  de¬ 
scribe  it  in  language. 

Q.  You  could  not  state  the  manner  in  which  duties  are  liquidated,  the  process,  and 
the  offices  through  which  it  passes  in  order  to  ascertain  precisely  the  amount  of  duty  ? — 
A.  No  ;  I  would  not  attempt  that,  sir. 

THE  AUDITOR’S  DUTIES. 

Q.  What  are  the  auditor’s  duties  in  the  custom-house? — A.  The  auditor,  I  believe, 
as  I  understand  it — every  paper  comes — well,  it  is— to  cover  what  you  say — to  fix  the 
duties,  take  charge  of  and  audit  all  the  accounts. 

Q.  How  do  you  mean  to  fix  the  duties  ? — A.  Well,  I  do  not  profess  to  go  into  the  de¬ 
tails  ;  I  am  not  a  book-keeper  or  accountant. 

REBATE  OF  DUTIES  OVERPAID. 

Q.  What  is  the  method  of  obtaining  rebate  of  duty ;  to  what  officer  would  you 
apply? — A.  I  should  send  to  Mr.  Clinch  at  once  and  tell  him  to  take  charge  of  it. 

Q.  I  am  not  speaking  of  what  you  would  do  ;  I  am  speaking  now  of  what  a  mer¬ 
chant  would  do,  how  would  he  obtain  it  ?— A.  If  he  was  to  apply  to  me  ? 

Q.  No,  sir.  Suppose  a  merchant  has  overpaid  his  duties,  and  considers  that  he  is  en¬ 
titled  to  a  rebate,  to  whom  would  he  apply  for  that — to  what  office? — A.  He  would 
apply  to  the  custom-house  officers  there. 

Q.  What  would  be  his  channel  of  relief? — A.  Well,  sir,  if  he  should  come  to  me  I 
should  send  him  to  Mr.  Clinch,  and  Mr.  Clinch  would  send  him  to  the  officer  in  charge 
of  that  business. 

*  *  #  ¥  *  ¥  *#* 
CORRESPONDENCE  WITH  MR.  BOUTWELL  AS  TO  THE  GENERAL  ORDER. 

Q.  What  I  want  to  get  from  you  is,  upon  what  ground  you  stood  in  your  correspond- 
'  ence  with  Mr.  Boutwell,  in  regard  to  the  propriety  of  a  change  in  the  general-order 
system,  as  carried  on  by  Leet  &  Stocking? — A.  My  recollection  of  it  is,  though  the 
ideas  in  that  letter  were  not  mine — they  were  Mr.  Clinch’s  and  Mr.  Clark’s — that  their 
theory  that  I  entirely  agreed  with  them  upon,  was  that  the  goods  were  not  as  safe  in 
the  custody  of  the  steamship  companies  as  they  would  be  in  the  custody  of  other  per¬ 
sons  who  were  disconnected  with  them.  1  stated  it  yesterday  more  lully,  when  my 
mind  was  on  that  subject. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXXXVII 


Q.  What  do  you  say  now  was  the  subject  of  the  correspondence  between  you  and 
Mr.  Boutwell  with  regard  to  the  general-order  system  in  New  York  ?  Was  it  not  as  to 
who  should  have  it  ? — A.  If  I  recollect  right  Mr.  Boutwell  advised  that  it  be  restored 
to  the  steamship  companies  on  the  Jersey  side  of  the  river. 

Q.  That  was  as  far  as  related  to  the  goods  from  their  own  steamers,  was  it  not  ? — X. 
Yes,  sir. 

Q.  Then  the  question  between  you  and  the  Secretary  was  as  to  who  should  have  so 
much  of  the  general-order  business  as  came  from  steamers  on  the  Jersey  side  of  the 
river  ? — A.  Yes,  sir. 

Q.  Now,  then,  the  subject  of  your  conversation  with  General  Grant  and  the  subject 
of  your  correspondence  with  the  Secretary  being  substantially  the  same  in  principle, 
what  reason  do  you  remember  you  gave  to  the  Secretary  for  not  acceding  to  his 
suggestions  ? — A.  In  response  to  that  letter  to  the  Secretary — Mr.  Clinch,  Mr.  Clark, 
and  two  or  three  other  officers ;  I  won’t  say  two  or  three  others,  but  there  was  at  least 
three  of  them;  Mr.  Clinch  and  Mr.  Clark  were  there  certainly,  and  I  think  the  .deputy 
in  the  warehouse  department — when  I  received  that  letter  from  the  Secretary  they 
came  into  my  room  at  my  request.  We  discussed  the  merits  of  it,  and  the  letter  was 
prepared  by  them — the  substance  dictated  by  them — in  which  I  agreed,  and  the  letter 
was  transmitted  to  the  Secretary.  The  argument  they  made  in  that  letter  was  that 
they  did  not  believe  the  steamship  companies  were  the  proper  custodians  to  be 
selected  by  the  Government  for  the  goods  upon  which  duties  had  not  been  paid. 

POWER  OF  SECRETARY  OF  TREASURY  OVER  GENERAL-ORDER  STORES. 

Q.  Do  you  know  that  the  Secretary  has  power  to  designate  such  warehouses  as  by 
law  are  entitled  to  receive  general-order  goods  ? — A.  I  have  always  been  informed  by 
Mr.  Clinch  and  Mr.  Clark  that  that  power  is  entirely  with  the  collector,  and  Mr. 
Clinch  has  gone  so  far  as  to  say  that  the  collector  individually  could  do  that  business 
himself. 

Q.  Do  you  not  know  that  the  Secretary  has  the  power  to  designate  such  warehouses 
as  by  law  are  entitled  to  receive  general-order  goods  ? — A.  My  information  and  knowl¬ 
edge  on  that  subject  is  that  he  has  not,  but  that  it  is  in  the  power  of  the  collector. 

Q.  Did  it  never  happen  during  your  period  in  office  that  the  Secretary  made  such 
designation  ? — A.  I  do  not  think  it  ever  did,  sir. 

Q.  Did  you  ever  look  at  the  law  on  that  subject  ? — A.  I  suppose  I  have  seen  the  law, 
-sir,  but  I  have  had  it  explained  to  me  by  Mr.  Clinch  and  Mr.  Clark. 

Q.  Have  you  ever  seen  the  printed  list  in  the  custom-house  of  the  salaries,  contain¬ 
ing  on  the  last  page  a  statement  as  to  the  authority  of  the  Secretary  to  designate  as 
warehouses,  of  class  three,  such  stores  as  may  receive  the  general-order  business  ? — A. 
I  don’t  recollect  seeing  them ;  I  may  have. 

We  refrain  from  multiplying  these  extracts.  The  simple  truth  is, 
that  Mr.  Murphy’s  ignorance  of  his  most  ordinary  duties  knew  hardly 
any  limits. 

To  speak  more  exactly,  let  us  say  rather  that  the  extent  of  what  he 
did  not  know  was  as  nearly  as  possible  commensurate  with  the  extent 
of  what  he  should  have  known. 

As  has  been  seen,  Mr.  Clinch  is  continually  referred  to  by  Mr.  Murphy 
as  his  director  in  all  matters.  This  led  to  some  inquiries,  (vol.  3,  p.  406.) 

By  Mr.  Bayard  : 

Q.  Mr.  Clinch  seems  to  be  the  pivot,  then  ? — A.  He  is  really  the  practical  working 
collector,  sir. 

Q.  Let  me  ask  you  about  Mr.  Clinch.  Has  he  not  been  in  the  office  a  great  many 
years  ? — A.  Over  thirty  years. 

Q.  Is  it  not  Mr.  Clinch’s  long  experience  there  that  enables  him  in  this  way  to  be¬ 
come  the  pivot  on  which  the  machinery  of  that  great  office  turns? — A.  It  is,  sir;  his 
great  experience  and  his  great  integrity.  • 

Q.  Then  it  is  his  experience  and  his  long  tenure  of  office?— A.  He  is  a  great  relief  to 
and  a  great  comfort  to  any  collector. 

Q.  To  have  a  man  of  such  experience  and  good  character  ? — A.  To  have  such  a  man 
of  experience. 

Q.  Kept  there  steadily  attending  to  public  business  ? — A.  Yes,  sir. 

Q.  Is  lie  not  allowed  to  enjoy  his  own  opinions  in  regard  to  political  matters  ? — A. 
He  is,  sir ;  Mr.  Clinch  is. 

Q.  And  he  attends  to  his  duties  and  does  that  publicly,  and  is  permitted  to  remain  ? — 
A.  Yes,  sir. 

Q.  No  matter  what  may  be  the  ebb  or  flow  of  party  ? — A.  That  is  so,  sir. 

Q.  And  the  result  is  that  the  collector  has,  as  you  say,  a  great  comfort  in  this 
officer? — A'.  Yes,  sir. 


CXXXVIII  NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Q.  Who  is  permitted  to  serve  tlie  public,  and  yet  maintain  his  personal  independ¬ 
ence? — A.  Yes,  sir.  He  is  an  exception  to  the  general  rule,  though. 

Q.  Yes,  there’s  where  the  trouble  comes  in,  Mr.  Murphy.  If  Mr.  Clinch  had  been 
subjected  to  the  summary  decapitation  that  you  applied  to  some  half  dozen  men  there 
for  their  differences  about  committees,  he  would  not  be  the  comfort  to  the  collector  he 
now  is. — A.  Well,  he  would  not  probably  be  there. 

These  two  men,  Murphy  and  Clinch,  each  from  an  opposite  point  of 
view,  illustrate  the  crying  need  of  the  most  thorough  real  reform  in  the 
New  York  custom-house.  With  such  a  reform,  officers  like  Clinch  would 
in  time  be  the  rule,  and  officers  like  Murphy  the  exception.  Without 
it,  Murphy  is  to-day  the  rule,  and  Clinch  the  rare  exception. 

After  such  disclosures  it  is  simply  impossible  to  pretend  that  u  the 
patrqnage,  officers,  or  employes  of  the  New  York  custom-house77  were 
not  used  to  control  the  State  conventions  of  the  republican  party  and 
its  organization.  The  attempts  at  denial,  though  made  by  men  like  A. 
B.  Cornell,  surveyor  of  the  port  of  New  York,  and  by  other  men  of  less 
prominence,  deceive  nobody ;  especially  against  the  testimony  of  Mr. 
Horace  Greeley,  George  W.  Palmer,  and  others. 

Equally  insignificant  is  the  assertion  of  Collector  Murphy,  Surveyor 
Cornell,  and  others  in  authority,  that  they  each  and  all  desired  their 
subordinates  not  to  attend  the  State  conventions.  If  they  expressed 
such  a  desire,  it  was  an  understood  sham,  and  was  so  treated  on  both 
sides.  The  subordinates  went  all  the  same,  and  took  no  harm  for  it  in 
any  way,  but  the  contrary.  Not  one  of  them  was  ever  in  peril  of  his 
place  or  of  loss  of  favor  in  any  way. 

THE  GENERAL  RESULT. 

We  believe  that  the  extracts  made  of  the  testimony  taken  in  this 
case,  in  relation  to  Mr.  Murphy  and  his  method  of  conducting  the  affairs 
of  the  collectorship,  will  render  it  obvious  that  he  was  a  very  unfit  man 
for  the  position,  totally  without  a  proper  comprehension  of  its  duties 
and  almost  totally  without  the  capacities  to  fulfill  them.  The  tenure  of 
political  office  under  his  administration  was  made  solely  dependent  upon 
bald  partisan  service,  generally  of  the  basest  character.  Merit  in 
office  was  overlooked  or  disregarded,  if  it  did  not  accompany  the  most 
facile  and  slavish  obedience  to  party  demands.  Personal  unworthiness 
and  profligacy  were  totally  disregarded  if  unhesitating  political  adhe¬ 
rence  was  given.  The  result  was  necessarily  fatal  to  the  public  service. 
To  be  a  good  and  reliable  public  officer  means  to  be  a  reliable  man  and 
good  citizen.  The  qualities  that  form  our  security  in  private  life  are 
our  best  safeguards  in  public  life.  A  public  official  who  will  sacrifice 
his  personal  convictions  of  right  and  independence  of  thought  to  gain 
or  keep  an  office  will  be  unworthy  of  trust  when  in  office.  If  such  an 
example  be  set  by  those  high  in  authority,  nothing  can  be  expected  but 
that  it  will  be  followed  by  their  subordinates.  Like  master,  like  man. 
If  the  collector  of  the  port  be  nothing  better  than  a  ward  politician, 
with  the  habits,  instincts,  and  ton^of  his  class,  his  subordinates  will, 
very  shortly,  be  found  to  follow  and  imitate  him.  If  Mr.  Murphy 
totally  overlooked  what  was  due  to  the  public  service  in  making  his 
appointments,  if  he  bargained  and  sold  the  places  of  inspector,  weigher, 
gauger,  and  the  like,  how  could  it  be  expected  that  his  appointees 
would  be  faithful  to  the  Government,  or  that  bribery  and  corruption, 
delinquency  and  abuse  should  not  mark  nearly  every  department  and 
feature  of  his  administration? 

It  is  not  too  much  to  say  that  such  is  the  general  significance  of 
the  many  hundred  pages  of  testimony  on  the  subject  taken  by  the 
committee.  Partial  extracts  have  been  given.  They  might  have  been 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXXXIX 


swelled  to  an  extent  utterly  beyond  the  limits  of  this  report.  A  few 
instances  in  the  same  direction  will  now  he  added. 

After  what  has  been  already  shown  no  one  will  be  surprised  to  know 
of  any  gross  carelessness  in  the  transaction  of  business  in  the  custom¬ 
house.  It  is  proved  by  the  naval  officer,  Mr.  A.  H.  Laflin,who  was  a  witness, 
that  the  errors  made  in  the  liquidation  of  duties  in  the  collector’s  de¬ 
partment  amounted,  in  eight  months,  from  June,  1871,  to  February, 
1872,  in  a  single  division,  to  a  million  of  dollars.  These  errors  were 
mostly  of  the  grossest  kind — mere  arithmetical  mistakes.  As  to  errors 
in  the  other  divisions  the  witness  could  not  speak,  no  statement  hav¬ 
ing  been  made  up.  (Volume  3,  pp.  297,  298,  299.) 

Here  is  the  judgment  delivered  under  oath  against  the  whole  system 
before  the  joint  committee  of  1871  by  William  E.  Dodge,  the  head  of 
the  great  house  of  Phelps,  Dodge  &  Co.,  and  one  of  the  oldest  and  most 
eminent  of  New  York  merchants,  (report  of  1871,  pp.  45,  46,  47  :) 

Q.  Do  you  think  that  the  present  system  tends  to  induce  fraud  and  corrujdion  in  the 
employes  ?— A.  I  do.  I  have  no  hesitation  in  saying  so. 

Q.  Have  you  good  reason  to  believe  that  there  are  fraudulent  transactions  generally 
in  the  collection  of  the  revenues  here  ? — A.  Iam  not  sufficiently  informed  to  give  an 
opinion.  I  have  no  hesitation  in  saying  this  :  that  from  the  standard  of  character  in 
the  custom-house,  I  would  not  take  the  average  of  employes  into  my  store  under  any 
consideration,  or  trust  them  with  my  business  at  all. 

Q.  By  “  character  ”  do  you  mean  business  or  moral  character  ? — A.  I  mean  moral 
character  and  business  qualifications — both. 

*******  * 

Q.  How  does  the  present  system  of  appointment  to  custom-house  places  affect  the 
commercial  interests  of  New  Nork  and  the  country  ? — A.  My  impression  is  that  if  char¬ 
acter  and  qualifications  were  the  standard  of  employes  in  the  custom-house,  that  two- 
thirds  of  the  number  now  paid  by  the  Government  would  do  all  the  business  better 
than  it  is  done  now. 

Q.  And  as  to  expense  ? — A.  Equally  as  cheap.  It  cannot  fail  to  be  a  charge  on  the 
commerce  of  New  York  to  have  its  custom-house  a  hospital  for  broken-down  politi¬ 
cians.  That  is  just  what  it  is.  There  is  no  use  in  talking  about  it ;  that  is  just  what; 
it  is.  There  are  men  there — hundreds  of  them — that  I  would  not  allow  to  come  in  my 
office  if  they  would  come  for  nothing.  I  would  not  trust  them  in  my  store  to  have 
anything  to  do  with  my  goods.  They  are  broken-down  politicians,  skilled  only  in 
political  manipulations.  For  rapidity  and  correctness  in  performing  the  business,  and 
the  intricate  calculations  necessary  in  the  custom-house,  a  man  should  learn  and  under¬ 
stand  it  and  get  the  facilities.  In  our  house  we  train  men  for  particular  branches  of 
business,  and  have  clerks  who  have  been  at  the  same  desk  for  twenty  and  thirty  years. 
A  man  who  has  been  in  the  custom-house  for  ten  years  knows  how  to  do  the  business, 
where  to  find  the  necessary  papers,  &c.  In  his  place  there  comes  a  stupid,  drunken, 
broken-down,  swearing  fellow,  whom  you  have  to  tell  how  to  do  his  business  and 
show  where  to  find  the  papers,  &c: 

James  H.  Young,  a  custom-house  inspector,  testified  to  the  same  effect 
also  in  1871,  and  that  things  had  been  getting  worse  : 

Q.  What  is  the  state  of  the  custom-house  at  the  present  time  ? — A.  I  think  more 
thoroughly  demoralized  than  it  has  been  since  I  have  been  there ;  I  do  not  know  where 
to  commence  reforms. 

Mr.  Young  was  a  witness  before  this  committee  and  testified  at 
much  length.  He  showed  himself  a  valuable  witness,  of  unusual  intelli¬ 
gence,  force  of  character,  and  candor. 

Of  course  what  was  bad  in  February,  1871,  did  not  mend  much  the 
rest  of  the  year  under  Collector  Murphy’s  system. 

From  authority  at  least  as  high  as  the  two  witnesses  named,  from 
Secretary  Boutwell  himself,  we  have  a  later  and  still  stronger  statement 
in  the  same  general  direction,  in  proof  before  the  present  committee. 

In  regard  to  a  large  and  important  branch  of  the  customs  service,  the 
passing  of  the  baggage  of  passengers  arriving  in  port,  we  have  in  testi¬ 
mony  given  before  the  committee  by  Mr.  Charlton  Lewis,  the  then  man¬ 
aging  editor  of  the  New  York  Evening  Post,  the  admission  of  Secretary 
S.  Kep.  227 - xi 


CXL 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


Bout  well,  made  to  Mr.  Lewis  as  late  as  December,  1871,  a  few  weeks 
before  he  testified,  that  the  “  corruption  ”  of  the  inspectors  in  taking 
bribes  for  passing  baggage,  without  paying  duty,  a  deserved  to  be  called 
universal,”  but  that  “  he  could  see  no  remedy  for  it  whatever.”  (V ol. 
1,  pp.  89,  94.)  It  is  not  easy  to  say  which  admission  of  the  chief  officer 
of  the  Treasury  is  the  most  startling,  that  the  u  corruption  ”  was  “  uni¬ 
versal,”  or  that  he  u  could  see  no  remedy  for  it.” 

While  in  direct  terms  this  admission  of  the  Secretary  relates  to  a 
single  branch  of  the  customs  service,  it  is  indicative  of  a  much  more 
general  evil.  A  u  corruption  which  deserves  to  be  called  universal”  in 
one  branch  of  the  service,  where  it  happens  to  be  detected,  is  not  con¬ 
fined  to  it.  It  must  extend  itself  to  other  branches,  though  for  awhile 
it  is  better  concealed  there.  In  truth,  such  is  the  general  result  of  the 
testimony. 

NO  CONVICTIONS  OF  CRIMINALS. 

Indeed,  the  difficulty  is  to  find  any  department  of  the  public  service 
in  New  York,  connected  with  the  administration  of  the  customs,  that 
does  not  show  a  serious  demoralization.  Thus,  notwithstanding  the 
numerous  frauds  on  the  customs  revenue,  not  one  has  been  criminally 
prosecuted  to  conviction  of  the  offender  by  the  present  district  attorney, 
except  two  or  three  trifling  cases  of  smuggling  by  the  hands  on  board 
ship.  (Yol.  1,  page  225.)  In  one  striking  instance,  a  great  fraud  of 
nearly  two  millions,  by  one  Blatchford,  a  deputy  collector,  has  never 
been  prosecuted,  but  has  been  left  to  slumber,  though  the  proof  seems 
to  have  been  ample  to  convict  him  and  his  accomplices.  (See  testimony 
of  George  W.  Palmer,  vol.  1,  pp.  274  to  278.) 

THE  CUSTOM-HOUSE  WITNESSES  AND  THEIR  TESTIMONY. 

No  more  striking  proof  of  a  wide  demoralization  could  be  asked  than 
is  supplied  by  the  conduct  of  the  witnesses  from  the  custom-house  while 
under  examination  before  the  committee.  Cloyes  and  Du  Moulin,  in  the 
case  of  the  coal-ship  Princeton,  furnish  instances  that  are  simply  shock¬ 
ing,  of  gross,  downright  false  swearing.  They  are  specimens  of  one 
class  of  witnesses,  of  whom  there  were,  unfortunately,  too  many  be¬ 
fore  us. 

Another  much  larger  and  more  respectable  class  were  distinguished 
by  a  painful  want  of  candor  and  a  studied  effort  to  withhold  or  to  cut 
down  every  fact  that  might  damage  the  administration  of  the  customs 
service  or  any  of  its  affiliated  interests,  such  as  the  general  order. 

Throughout,  this  was  by  no  means  the  least  of  the  difficulties  which 
at  every  step  obstructed  the  efforts  of  the  undersigned  to  ascertain  the 
true  condition  of  the  customs  service  at  New  York. 

With  rare  exceptions,  such  as  Deputy  Collector  Clinch,  Inspector 
James  H.  Young,  and  a  few  others,  the  witnesses  from  the  custom¬ 
house,  unless  when  called  to  make  some  proof  of  a  formal  nature,  ap¬ 
peared  to  deem  it  their  duty  to  admit  as  little  as  possible  and  to  deny 
as  much  as  possible,  except  at  the  end  of  a  protracted  and  searching 
examination. 

Throughout  it  was  too  plain  that  the  deplorable  practice  of  so  many 
officials  taking  falsely  once  a  month,  at  the  receipt  of  their  pay,  the 
oath  against  bribes  or  gratuities  for  services  rendered,  is  but  the  crop¬ 
ping  out  of  a  wide-spread  laxity,  if  not  corruption,  of  morals,  sapping 
all  public  duties  and  obligations  alike. 

In  keeping  with  this  is  the  significant  fact  established  in  testimony, 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXLI 


that  from  the  first  to  the  last  of  our  investigation  no  information  in  aid 
of  our  labors,  or  tending  to  expose  or  correct  an  abuse,  was  voluntarily- 
furnished  by  any  one  of  the  six  or  eight  principal  officers  of  the  cus¬ 
toms.  (See  testimony  of  George  W.  Palmer,  vol.  3,  p.  609.) 

DIFFICULTIES  OF  THE  INVESTIGATION. 

The  sources  of  information  within  the  custom-house,  on  the  one  hand, 
being  thus  almost  wholly  dried  up,  those  within  the  mercantile  body 
alone  remained.  These  were  greatly  impaired,  not  only  by  an  appre¬ 
hension  of  the  consequences  in  their  business,  very  general  among  the 
merchants,  if  they  should  testify  to  the  damage  of  the  custom-house 
officials,  but  by  such  proceedings  in  the  committee  as  those  shown  in 
the  case  of  L.  G.  Tillotson,  which  was  but  one  case  out  of  many.  (Vol. 
1,  pp.  591,  592,  593,  and  595.) 

The  effect  of  such  proceedings  (their  intent  we  do  not  here  speak  of) 
was  inevitably  to  repel  the  great  majority  of  the  merchants  of  New  York 
from  testifying  at  all.  (See  also  vol.  1,  pp.  278  to  280.) 

Such  proceedings,  however,  were  quite  in  keeping  with  the  extraordi¬ 
nary  order  issued  from  Washington,  during  the  sittings  of  the  commit¬ 
tee,  for  the  prosecution  of  the  persons,  merchants  and  others,  impli¬ 
cated  before  the  committee  in  the  giving  of  bribes  and  gratuities  to  the 
officials,  contrary  to  law. 

If  in  the  face  of  such  obstructions,  meeting  us  at  every  step,  so  much 
progress  was  made ;  if,  with  the  sources  of  information  nearly  or  quite 
closed  against  us,  so  much  was  ascertained ;  it  is  self-evident  that  the 
abuses  discovered  are  but  a  handful  out  of  those  that  exist,  and  that 
what  was  done  was  not  a  tithe  of  what  remains  to  be  done  and  can  be 
done  hereafter  whenever  circumstances  more  favorable  to  investiga¬ 
tion  shall  arise. 

POLITICAL  ASSESSMENTS. 

We  have  omitted  to  make  reference  to  the  question  of  political  assess¬ 
ments;  but  it  has  been  fully  and  satisfactorily  established  that  it  was 
the  custom  authorized  and  allowed  by  the  collector  to  make  involuntary 
assessments  upon  the  custom-house  officials,  the  proceeds  of  such  assess¬ 
ments  to  be  spent  for  party  purposes ;  and  though  not  expressly  stated, 
yet  it  was,  notwithstanding,  perfectly  well  understood  that  the  official 
who  declined  to  submit  himself  to  this  exaction  would  find  but  little 
favor,  and  perhaps  be  soon  discharged.  These  assessments  were  irregu¬ 
lar  as  to  their  date,  but  when  made  amounted  to  about  2  per  cent, 
upon  the  annual  salary.  Now,  it  is  also  a  matter  of  proof  that  the 
salaries  paid  to  the  subordinate  custom-house  officials  are  not  in  any 
degree  too  high  for  the  service  which  they  are  expected  to  render,  but, 
on  the  contrary,  a  wise  public  economy  would  probably  adopt  a  general 
increase  in  their  amount.  We  have  the  testimony  of  Mr.  A.  T.  Stewart, 
himself  a  man  of  most  remarkable  administrative  ability,  who  has  in  his 
own  employment  perhaps  twice  as  many  persons  as  are  employed  in  the 
New  York  custom-house,  that  he  himself  would  willingly  pay  for  per¬ 
sons  competent  to  perform  the  duties  required  of  them  in  the  weigher’s 
department  double  the  salaries  given  by  the  Government  of  the  United 
States.  It  seems  to  us  that  those  principles  of  compensation  and  em¬ 
ployment  which  are  found  useful  and  lead  to  success  in  the  business 
affairs  of  private  individuals  are  not  less  true  when  applied  to  the  public 
service.  To  make  tenure  of  office  dependent  upon  the  mere  will  of  the 
superior  or  upon  the  shifting  tides  of  political  party  ascendency,  is  a  sys- 


CXLII 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


tem  which  would  soon  lead  to  the  bankruptcy  of  the  private  merchant 
who  adopted  it.  By  a  course  of  reasoning  equally  applicable  to  public 
affairs,  the  government  that  adopts  it  must  suffer.  It  cannot  well  be 
denied  that  good  behavior  in  office  should  be  the  only  condition  imposed 
upon  permanent  tenure ;  that  the  public  service  should  be  the  only 
thing  to  be  regarded,  and  the  individual  who  performed  that  might  feel 
assured  that  he  would  be  allowed  to  enjoy  his  individual  opinions  upon 
political  and  other  subjects  in  perfect  self-respect  and  without  fear  of 
the  frowns  of  his  official  superiors.  Certain  it  is  that  this  rule  could 
safely  be  applied  to  all  offices  simply,  ministerial.  In  others  of  a  grade 
that  necessarily  reflected  the  political  policy  of  an  administration,  such 
as  cabinet  officers,  it  may  be  necessary,  and  probably  is  so,  that  con¬ 
currence  of  sentiment  with  the  Executive  should  be  an  additional  con¬ 
dition  of  official  tenure. 

How  very  far  from  this  obvious  view  of  the  civil  service  is  its  pres¬ 
ent  condition,  is  but  too  clear,  from  the  mass  of  testimony  taken  by 
this  committee,  a  mass  so  great  and  touching  so  many  heads  of  abuse, 
that  we  have  had  to  abstain  from  even  referring  to  a  very  large  part  of 
the  proofs. 

We  have  exemplified  our  views  by  the  two  opposite  cases  of  Mr. 
Clinch  and  Mr.  Murphy.  We  might  have  dwelt  upon  other  instances, 
such  as  the  case  of  General  George  W.  Palmer,  the  appraiser  of  the 
port.  (Yol.  1,  pp.  267,  269,  275,  287 ;  Thompson’s  proposition,  295,  296; 
also  vol.  3,  pp.  580,  &c.) 

In  his  case,  an  able  and  upright  public  servant,  who  had  distinguished 
a  short  official  career  by  one  important  reform  of  the  system  of  damage- 
allowances,  and  many  minor  reforms,  was  removed  from  office,  though 
no  official  cause  was  or  could  be  assigned,  and  though  his  efficiency  in 
office  was  fully  recognized  at  Washington.  He  was  removed  simply 
because  he  would  not  use  his  office  for  the  removal  of  faithful  subordi¬ 
nates,  and  other  mere  partisan  purposes,  as  Collector  Murphy  might 
dictate. 

While  such  a  man  was  removed  from  his  office  on  such  grounds,  such 
a  man  as  James  M.  Thompson  was  about  the  same  time  appointed  to  the 
important  office  of  weigher. 

This  was  done,  though  he  had  previously  made  to  General  Palmer  a 
proposition  for  a  corrupt  criminal  partnership,  in  making  fraudulent 
damage-allowances,  for  their  private  gain.  Of  this  crime  Collector 
Murphy  and  Secretary  Boutwell  were  both  notified  by  General  Palmer, 
through  H.  C.  Lake,  a  weigher.  (Yol.  1,  pp.  462,  463,  &c.)  Yet 
Thompson  was  made  weigher,  and  still  held  the  office  at  the  date  of  the 
latest  proof  before  the  committee.  Thompson,  having  been  summoned 
as  a  witness  in  his  own  defense,  gave  a  positive  denial.  There  is  no 
doubt,  however,  of  the  entire  truth  of  General  Palmer’s  testimony. 
Another  witness,  N.  T.  Perkins,  proved  another  corrupt  proposition 
from  the  same  man  while  harbor-master  of  New  York.  (Yol.  2,  p.  570.) 

THE  PRESIDENT’S  LETTER  TO  AIR.  MURPHY"  ON  HIS  RETIRING  FROM 

OFFICE. 

If  anything  could  more  surprise  us  than  the  appointment  of  Mr.  Mur¬ 
phy  as  collector  in  the  first  place,  and  his  maintenance  so  long  as  collect¬ 
or  in  the  next  place,  it  would  be  found  in  the  manner  of  his  quitting 
the  office.  Here  is  the  letter  written  him  on  the  occasion  by  the  Presi¬ 
dent  of  the  United  States : 

Executive  Mansion,  Washington,  D.  C., 
November  20,  1871. 

Dear  Sir  :  Your  letter  of  the  18th  instant,  tendering  your  resignation  of  the  office 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXLIII 


of  collector  of  the  port  of  New  York,  with  reasons  therefor,  is  received.  It  gives  me 
great  pleasure  to  bear  testimony  to  the  efficiency,  honesty,  and  zeal  with  which  you 
have  administered  the  office  so  long  as  it  has  been  intrusted  to  your  keeping.  Your 
own  peace  of  mind,  no  doubt,  will  be  enhanced  by  leaving  the  office  of  collector^  but 
I  doubt  whether  such  a  course  will  in  any  sense  be  a  benefit  to  the  public  service. 
Under  your  administration,  the  revenues  from  the  New  York  custom-house  have  been 
largely  increased,  and  the  cost  of  collection  in  proportion  to  the  amount  collected  has 
been  greatly  diminished.  This  is  shown  by  the  records  of  the  Treasury  Department. 
You  have  had  my  unqualified  confidence  ever  since  you  entered  the  office  of  collector. 
You  had  that  confidence  before,  or  the  appointment  would  not  have  been  tendered  you. 
That  confidence  is  still  unshaken,  and  in  accepting  your  resignation,  I  desire  to  give 
you  the  fullest  assurance  of  this  fact.  Whether  you  remain  in  or  out  of  office,  time 
will  convince  a  just  public  of  your  entire  innocence  of  the  charges  brought  against 
you. 

With  great  respect,  your  obedient  servant, 

U.  S.  GRANT. 

Hon.  Thomas  Murphy,  Collector  of  the  Port  of  New  York. 

The  President  alleges  the  increase  of  the  revenue  and  the  diminished 
cost  of  collection  under  Mr.  Murphy's  administration.  Both  these  facts 
are  due  to  other  causes,  wholly  independent  of  Mr.  Murphy.  The  rev¬ 
enue  increased  because  the  business  greatly  increased.  The  percentage 
of  cost  of  collection  was  less  than  under  some  of  Mr.  Murphy’s  prede¬ 
cessors,  for  the  obvious  reason  that  it  costs  less  in  proportion  to  collect 
a  large  revenue  than  a  small  one.  All  this  is  explained,  if  explanation 
was  needed,  in  half  a  dozen  places  of  the  testimony. 

His  statement  on  this  head  the  President  doubtless  took  from  others. 
We  do  not  stop  to  criticise  it ;  we  speak  only  of  the  letter  in  its  other 
aspects. 

Such  a  letter  would  be  rather  unusual  in  any  case.  Yet  we  will  not 
say  that  it  would  be  unfit  if  addressed  by  the  Executive  head  of  the 
Government  to  a  public  servant,  retiring  from  office  after  years  of  great 
duties  ably  and  faithfully  performed ;  in  a  word,  to  a  public  servant  hav¬ 
ing  every  quality  which  Mr.  Murphy  had  not.  To  such  a  servant  in 
such  a  case  what  could  any  President  say  more  than  the  President  has 
seen  fit  to  say  to  Mr.  Murphy  ? 

Hoes  not  his  letter  to  Mr.  Murphy,  written  in  the  full  light  of  notori¬ 
ous  facts,  exalt  evil  as  if  it  was  good,  and  hold  up  to  general  admiration 
the  wrong  as  if  it  was  the  right!  What  way  more  effectual  could  be 
devised  practically  to  rub  out  all  distinctions  between  good  and  evil, 
right  and  wrong,  in  the  public  service  ! 

With  Mr.  Murphy  we  have  dealt  throughout  in  his  public  capacity 
as  the  head  of  the  greatest  custom-house  in  the  country,  and  in  such  of 
his  relations  as  grew  out  of  that  position.  We  had  no  concern  with  him 
in  any  merely  personal  aspect.  What  manner  of  man  he  was  in  his  high 
place  appears  upon  the  evidence  furnished  in  large  part  by  himself. 
As  thus  presented,  he  is  doubtless  a  just  expression  of  the  present  state 
and  condition  of  the  civil  service  of  the  country — no  better,  no  worse. 
It  is  in  this  point  of  view  that  he  and  his  administration  of  the  Hew 
York  custom-house,  as  exhibited  in  proof  before  the  committee,  are 
worthy  of  the  most  serious  consideration. 

In  the  reflections  which  we  have  been  compelled  to  make  in  the  course 
of  our  duty  of  investigation,  under  the  resolution  of  the  Senate,  upon  the 
administration  of  Mr.  Murphy  and  a  large  number  of  the  officials  em¬ 
ployed  under  him,  we  cannot,  injustice,  omit  an  expression  of  our  belief 
that  the  custom-house  contains  many  honorable,  faithful,  efficient,  hardly 
worked,  and  poorly  paid  officials.  There  are  men  who  have  been  there 
in  the  public  service  for  many  years  who  have,  by  their  intelligence  and 
devotion  to  duty,  become  essential  to  the  proper  execution  of  public  busi¬ 
ness,  and  who  are,  as  it  were,  the  pivots  upon  which  the  complicated 


cxLiy, 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


machinery  of  that  vast  establishment  revolves.  Thus,  for  instance,  Mr. 
Charles  B.  Clinch  was,  and  perhaps  is,  practically  the  collector  of  customs 
in  New  York,  although  his  rank  and  title  is  but  that  of  deputy.  His 
long  experience,  excellent  personal  character,  and  steady  devotion  to 
his  business,  have  thoroughly  qualified  him  for  all  the  duties  of  his  place. 
In  the  same  class  we  place  Mr.  Ogden,  the  auditor,  Mr.  Bobinson,  the 
cashier,  Mr.  Townley,  assistant  appraiser,  and  others  in  the  custom¬ 
house,  or  in  the  appraisers’  department.  It  is  such  men,  though  few  in 
number  compared  with  the  whole  body  of  officials,  who  really  maintain 
the  New  York  custom-house  in  something  like  working  order,  and  keep 
it  from  falling  into  utter  demoralization  and  confusion  by  reason  of  its 
own  abuses.  But  these  men  exist  there  and  hold  their  places  rather  in 
spite  of,  than  because  of,  the  doctrines  and  practices  of  Mr.  Murphy’s 
administration.  We  have  given  many  instances  of  Mr.  Murphy’s  unsuc¬ 
cessful  political  bargains.  The  successful  ones,  of  course,  we  never  hear 
of,  yet  the  number  of  those  who  have  accepted  his  propositions,  and  who 
are  now  drawing  their  pay  from  the  Government,  must  be,  of  necessity, 
too  numerous  for  the  public  welfare. 

Of  the  present  collector  of  New  York  we  have  not  designed  to  speak 
in  any  adverse  spirit.  He  was,  it  is  true,  the  personal  friend  and  asso¬ 
ciate  of  Mr.  Murphy,  and  was  much  aided  in  obtaining  his  present  place 
through  the  influence  of  Mr.  Murphy  with  the  President  of  the  United 
States.  When  the  committee  commenced  its  labors  his  administration 
could  hardly  be  said  to  have  commenced  so  as  to  exhibit  any  proceed¬ 
ings  or  policy  for  which  he  should  be  held  responsible.  No  proof  as  to 
either  at  any  subsequent  period  was  before  the  committee.  But  in  the 
case  of  the  general-order  business,  as  we  have  already  stated,  he  has  com¬ 
menced  reforms  which  promise  to  be  valuable  and  enduring,  and  it  may 
still  be  that,  from  the  exposures  that  have  been  made  in  the  present 
investigation,  an  amelioration  in  the  public  service  at  the  New  York 
custom-house  may  result.  It  certainly  is  much  needed.  The  principles 
of  good  government  are,  after  all,  although  profound  in  their  operation,, 
very  simple  in  their  nature.  At  the  very  base,  strict  and  rigid  pecuniary 
honesty  must  lie.  If  this  be  wanting,  if  pecuniary  delinquencies  shall 
be  condoned  because  the  public  treasury  is  the  sufferer,  and  not  an  indi¬ 
vidual,  then  from  such  an  admission  proceeds  a  whole  catalogue  of  evils 
and  corruption.  If  a  man  in  official  position  bestows  an  office  of  trust 
and  emolument  upon  another  because  he  is  a  personal  or  political  friend, 
and  without  regard  to  the  fact  whether  he  is  competent  and  willing  to 
render  a  just  equivalent  of  service  for  the  salary  he  receives,  then  the 
public  treasury  is  defrauded,  is  robbed  to  the  precise  amount  of  that 
friend’s  defalcation  in  duty ;  and  in  dishonesty  the  crime  is  not  propor¬ 
tioned  to  the  amount  that  is  taken,  but  to  the  departure  from  moral 
principle  which  is  involved.  Public  men  have  no  right  to  receive  per¬ 
sonal  favors  at  public  cost.  They  have  no  right  to  enrich  themselves, 
their  families,  or  their  friends,  at  public  cost.  It  is  a  breach  of  trust 
when  such  things  are  permitted,  and  no  public  service  where  they  are 
tolerated  can  fail  to  become  corrupt  and  worthless. 

We  have  pointed  out  the  evils  that  resulted  from  an  unwise,  impolitic 
law,  such  as  that  permitting  the  seizure  of  books  and  papers  of  mer¬ 
chants.  But  the  great  mass  of  the  abuses  to  which  we  have  referred  are 
those  of  maladministration  ;  and  until  men  shall  be  placed  in  power  who 
realize  the  requirements,  and  are  competent  to  understand  and  execute 
the  duties  of  civil  administration,  without  personal  favor,  and  with  a 
single  eye  to  public  interests  alone,  the  evils  we  have  pointed  out  cannot 
be  expected  to  diminish,  but,  on  the  contrary,  to  grow  worse  and  worse. 


NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


CXLV 


Selected  as  the  undersigned  have  been  to  take  part  in  an  investiga¬ 
tion  of  public  affairs  which,  in  the  present  condition  of  the  country, 
were  solely  in  the  hands  of  their  political  opponents,  they  have  been 
entirely  conscious  that,  although  their  presence  on  this  committee  was 
involuntary  upon  their  part,  and  owing  wholly  to  the  action  of  the  ma¬ 
jority  of  the  Senate,  their  duty  was  an  important  one.  They  have  not, 
therefore,  shrunk  at  all  from  the  protracted  labor  necessarily  involved  in 
the  investigation,  nor  from  the  natural  hostility  which  their  efforts  to 
discover  the  truth  and  proclaim  it  has  aroused  toward  them.  The  in¬ 
vestigation  on  their  part  has  been  made  entirely  with  reference  to  pub¬ 
lic  results,  and  if  individual  interests  and  feelings  have  been  affected 
by  the  course  which  the  testimony  has  taken,  it  has  been  necessarily 
incidental  to  the  performance  of  a  public  duty.  Being  earnestly  desir¬ 
ous  of  a  reformation  in  the  abuses  which  we  believe  to  exist,  and  to 
some  of  which  reference  has  been  made  in  the  foregoing  pages,  we  have 
forborne,  as  much  as  possible,  from  giving  our  opinions  or  deductions 
from  the  testimony.  We  have  generally  preferred  to  let  the  facts,  as 
collated  by  us  from  the  testimony,  speak  for  themselves.  We  have  not 
shrunk,  however,  from  indicating  where,  in  our  opinion,  the  responsibil¬ 
ity  lies.  The  evils  which  have  been  proven  to  exist  have  their  source, 
as  we  have  said  and  now  here  repeat,  much  less  in  the  existence  of  im¬ 
perfect  or  mischievous  laws  than  in  the  want  of  capacity  and  fitness  on 
the  part  of  those  who  fill  the  offices.  The  fundamental  cause  of  this 
great  abuse,  and  the  real  responsibility  for  it,  are  to  be  found  in  an 
improper  administration  of  the  appointing  power  in  the  Government. 

By  the  Constitution  and  laws  of  the  United  States  the  President  has 
plenary  power  over  the  civil  service  of  the  country.  Nearly  all  ap¬ 
pointments  to  office  proceed  directly  or  indirectly  from  him.  By  the 
Constitution  he  is  commanded  u  to  take  care  that  the  laws  be  faithfully 
executed,”  and  by  his  oath  of  office  he  binds  himself  u  faithfully  to 
execute  the  office  of  President  of  the  United  States.”  He  is  to  put  fit 
men  in  office,  and  to  see  that  the  laws  do  not  fail  of  execution  by  their 
misconduct. 

His  power  over  the  subject  is  exclusive.  So  is  his  responsibility.  His 
duty  is  equally  plain  and  paramount. 

Having  all  the  power  necessary,  if  he  has  the  capacity  and  will  to  give 
to  the  country  an  honest,  efficient  civil  service,  he  will  do  it.  If  he  fails 
to  bestow  this  great  blessing  on  the  people,  it  is  not  for  want  of  power 
in  himself.  It -can  only  be  for  want  of  either  the  will  or  the  capacity; 
it  may  be,  of  both.  Whatever  the  cause,  the  evils  of  his  failure  are 
manifold  and  serious.  His  abuses  of  the  appointing  power  are  repro¬ 
duced  with  mischievous  fidelity  through  the  body  of  the  subordinates 
in  the  civil  service,  to  the  scandal  and  oppression  of  the  people  and  the 
gradual  general  lowering  of  their  moral  tone. 

The  cure  for  the  evil  must  be  sought  in  the  same  high  quarter  where 
the  evil  had  its  rise.  It  is  there  that  the  power,  the  duty,  and  the  re¬ 
sponsibility  lie.  There  the  cure  is  to  be  applied.  Anything  short  of 
this  is  trilling  with  the  evil.  It  is  dealing  with  the  efiect  instead  of  with 
the  cause. 

T.  F.  BAYARD. 

E.  OASSERLY. 


1 

1111 

ill 

3  01 

12  061 

601 

800 

CXLYI  NEW  YORK  CUSTOM-HOUSE  INVESTIGATION. 


APPENDIX. 


THE  LETTERS  FROM  SECRETARY"  BOUTWELL  TO  COLLECTOR  GRINNELL 
ON  THE  GENERAL-ORDER  SYSTEM. 


Treasury  Department,  June  1, 1870. 

Sir  :  Upon  full  consideration  of  the  papers  relative  to  the  storage  of  goods  upon 
delivery,  from  the  vessels  of  the  foreign  steamship  companies,  I  can  see  no  valid  objec¬ 
tion  to  the  use  of  the  stores  upon  the  companies’  piers,  if  those  stores  can  be  placed 
under  the  exclusive  control  of  the  officers  of  the  customs.  By  this  I  mean  that  the 
officers  of  the  vessels,  and  the  subordinates  of  every  kind,  shall  be  excluded  from 
those  store-houses.  In  fine,  the  store-houses  upon  the  piers  are  to  be  treated  and 
managed  precisely  as  other  store-houses  are  treated  and  managed,  and  the  proprietors 
of  the  steamships,  and  their  servants,  to  be  treated  by  the  store-house  keepers  precisely 
as  all  other  persons  are  treated. 

Should  the  managers  of  the  steamships  consent  to  this  arrangement,  I  see  no  good 
reason  why  the  business  of  storage  cannot  be  restored  to  the  warehouses  on  the  piers. 

Very  respectfully, 


Hon.  Moses  H.  Grinnell, 

Collector  of  Customs,  New  York. 


GEO.  S.  BOUTWELL, 

Secretary. 


Treasury  Department,  June  9,  1870. 

Sir:  In  reply  to  your  letter  of  the  6th  instant,  inclosing  remonstrances  of  Messrs. 
Ollrichs  &,  Co.,  Kunhardt  &  Co.,  and  Charles  Franklyn,  esq.;  relative  to  their  bonded 
warehouses  at  Jersey  City  and  Hoboken,  I  have  to  say  that  I  can  see  no  objection  to 
the  storage  of  general-order  goods  in  these  warehouses  with  the  present  proprietors, 
under  the  restrictions  contained  in  my  letter  of  the  1st  instant.  I  intended  to  exclude 
the  officers  and  subordinates  of  the  vessels  employed  by  the  steamship  companies,  but 
the  proprietors  of  the  warehouses,  though  interested  in  the  ships,  may  have  custody 
ol  the  houses,  subject  to  the  check  of  the  store-keepers  appointed  in  the  usual  manner. 
A  sufficient  number  of  reliable  customs  officers  must  be  assigned  to  each  of  the  afore¬ 
mentioned  warehouses,  at  the  expense  of  the  proprietors,  to  secure  the  safe  custody  of 
all  merchandise  deposited  therein. 

With  this  precaution,  I  am  unable  to  perceive  why  ample  protection  to  the  Govern¬ 
ment  will  not  be  secured. 

I  return  herewith  copies  of  the  remonstrances,  as  requested. 

I  am,  very  respectfully, 


Moses  H.  Grinnell,  esq., 

Collector  of  Customs,  New  York. 


GEO.  S.  BOUTWELL, 

Secretary. 


